Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Oral Answers to Questions — AUSTRIA.

Mr. DAVID GRENFELL: 2.
asked the Secretary of State for Foreign Affairs whether the action of the Austrian Government in suppressing the trade union organisation of Austria has been brought to the notice of the League of Nations; and whether the League has issued or intends to issue any report upon such action?

The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): So far as I am aware, the answer to the first part of the question is in the negative and the second part does not, therefore, arise.

Mr. GRENFELL: Is it open to the League of Nations to make inquiries and see whether the opportunities that are given to trade union organisations affiliated to the International Labour Office are to be maintained?

Sir J. SIMON: I would refer the hon. Gentleman to the answer given to the bon. Member for East Wolverhampton (Mr. Mander) on 1st March. If he will examine it, he will see that the matter is really related to the structure of the International Labour Office.

Mr. KIRKWOOD: Will not the right hon. Gentleman bring it to the notice of the League of Nations?

Sir J. SIMON: I am afraid I could not answer further in reply to a supplementary question. There is considerable difficulty in seeing by what process that could be done.

Colonel WEDGWOOD: Is it not a fact that the great triumph of the Roman Catholic Church over the pagan working men of Austria has resulted in large con-
versions, if not to Christianity, at least to the understanding of the advantages of conformity?

Oral Answers to Questions — LORD PRIVY SEAL (MISSION).

Mr. HANNON: 3.
asked the Secretary of State for Foreign Affairs if he will make a statement on the results of the recent visit of the Lord Privy Seal to Berlin, Rome, and Paris?

Sir J. SIMON: I would refer my hon. Friend to the answer given to the hon. Member for Gower (Mr. D. Grenfell) on 5th March.

Mr. HANNON: Has not the Lord Privy Seal discharged the very difficult and delicate duties of his mission with great credit to himself and to the prestige of this country on the Continent?

Oral Answers to Questions — LIBERIA.

Mr. JOEL: 4.
asked the Secretary of State for Foreign Affairs if he can make any statement as to the virtual rejection by Liberia of the scheme of reform proposed by the League of Nations; and whether, in view of the attitude taken up by this country on the question of slavery, he proposes to press for a satisfactory settlement?

Sir J. SIMON: As regards the Liberian reply to the League's offer of assistance, I can add nothing to the answer which I gave to the hon. Member for Wolverhampton, East (Mr. Mander) on 28th February. My hon. Friend may be assured that His Majesty's Government will continue to use their influence towards securing an improvement in the present unsatisfactory state of affairs.

Oral Answers to Questions — ROYAL NAVY.

HIS MAJESTY'S SHIPS "CENTURION" AND "SHIKARI."

Mr. GEORGE HALL: 5.
asked the First Lord of the Admiralty if he will state the cost of running His Majesty's ship "Centurion," as Fleet target ship, and His Majesty's ship "Shikari," as attendant destroyer, for a full year; and the number of officers and ratings employed on each ship?

The FIRST LORD of the ADMIRALTY (Sir Bolton Eyres Monsell): The estimated annual cost of running His
Majesty's ship "Centurion" as Fleet target ship and His Majesty's ship "Shikari" as attendant destroyer is £80,900 and £16,100 respectively. The complements of these ships are: His Majesty's ship "Centurion," 17 officers and 164 ratings; His Majesty's ship "Shikari," four officers and 28 ratings.

HIS MAJESTY'S SHIPS "NELSON," "QUEEN ELIZABETH" AND "HOOD."

Mr. G. HALL: 6.
asked the First Lord of the Admiralty if he will give the numbers

—
H.M.S. "Nelson."
H.M.S. Queen "Elizabeth."
H.M.S. "Hood."


Peace Complement.
Commissioned and Warrant Officers
…
…
97
101
72


Chief and Petty Officers
…
…
223
204
213


Ratings
…
…
855
735
753


Boys
…
…
67
53
63






£
£
£


Annual cost of maintenance (including non-effective liability).
(a)362,500
319,300
324,500


(a) These figures include:








Annual cost of personnel (including non-effective liability).
…
…
282,700
254,500
239,700



Annual cost of ammunition
…
…
19,400
12,200
11,300



Annual cost of oil fuel
…
…
19,500
21,700
31,800

LONDON NAVAL TREATY.

Vice-Admiral TAYLOR: 7.
asked the First Lord of the Admiralty how many cruisers, destroyers and submarines can be laid down in accordance with Article 19 of the International Treaty for the Limitation and Reduction of Naval Armament, 1930, in view of ships which will become over-age in 1937, 1938 and 1939?

Sir B. EYRES MONSELL: Article 19 of the London Naval Treaty deals only with tonnage, and not with numbers of ships, which will depend on the individual tonnage of the new vessels. The tonnage which will become over-age in the three years mentioned is: cruisers 23,850, destroyers 2,960, submarines 6,395 tons. I should add that Article 19 also prescribes that tonnage may be laid down during the life of the Treaty in replacement of tonnage over-age before 31st December, 1936.

Vice-Admiral TAYLOR: Can my right hon. Friend say as to when this tonnage

of commissioned officers and warrant officers, and petty officers and ratings employed in His Majesty's ships "Nelson," "Queen Elizabeth," and the battle cruiser "Hood"; and will he state the annual cost of running each vessel, giving the cost of personnel, ammunition and oil fuel, separately?

Sir B. EYRES MONSELL: With the hon. Member's permission, I will circulate the figures in the OFFICIAL REPORT.

Following are the figures:

may be laid down—when the construction of these vessels may be started?

Sir B. EYRES MONSELL: In the 1934, 1935, and 1936 building programmes in respect of tonnage which becomes over age in 1937, 1938, and 1939, plus, as I have said, the outstanding tonnage which will be over age on the 31st December, 1936.

Colonel GRETTON: Can the right hon. Gentleman give the figures of the amount of tonnage which will become obsolete in each of the three years respectively, 1937, 1938, 1939?

Sir B. EYRES MONSELL: I have given that in the answer.

Colonel GRETTON: In the total, I think.

Sir B. EYRES MONSELL: I added them together for convenience. The biggest tonnage, I think, is in 1937. I forget the exact amount, but I know that in 1938 it is 19,000, and in 1939, nothing.

OIL FUEL CONTRACTS.

Mr. ROBINSON: 8.
asked the First Lord of the Admiralty what are the reasons for which the Royal Navy during the year 1933 was unable to take up the whole of the oil from coal for which it had contracted; and what was the precise nature of the oil covered by the contracts?

The FINANCIAL SECRETARY to the ADMIRALTY (Captain Euan Wallace): There was some misapprehension concerning the quantity of oil to be supplied, but the Admiralty has accepted all that was forthcoming from the contractor. The oil was a good bunker fuel having a calorific value only slightly lower than that of petroleum fuel.

Mr. ROBINSON: Can my hon. and gallant Friend say whether there is any fiscal preference given to oils of that kind used by the Navy, that is, British oil produced from coal?

Captain WALLACE: They get exactly the same preference as any other British oil.

Mr. ROBINSON: Is there any preference for British oils?

Captain WALLACE: The hon. Member had better ask the Treasury that.

PALESTINE.

Colonel WEDGWOOD: 9.
asked the Secretary of State for the Colonies why the Brown Book of the Hitler Terror is prohibited in Palestine, while Hitler's Mein Kampf is permitted to be sold?

The UNDER-SECRETARY of STATE for DOMINION AFFAIRS (Mr. Malcolm MacDonald): The High Commissioner for Palestine has been asked to report on this matter. My right hon. Friend will communicate with the right hon. Member when the report is received.

Colonel WEDGWOOD: Are we to understand that it is legal in the Jewish homeland to defame the Jews but not to defame the defamers?

Mr. JANNER: Will the hon. Gentleman at the same time cause inquiries to be made with regard to any other slanders against the Jewish people which are being issued or published in Palestine?

Mr. MacDONALD: If the hon. Member will give me any information that he has as regards the point, I will look into it.

EAST AFRICA.

Sir ROBERT HAMILTON: 10.
asked the Secretary of State for the Colonies whether he has yet received the report of the commission of inquiry into the administration of justice in criminal matters in East Africa; and if the report will be published and made available for Members of the House?

Mr. M. MacDONALD: This report was included among the subjects which my right hon. Friend hoped to discuss with the local authorities during his visit to East Africa. Pending his return, no decision will be taken.

Oral Answers to Questions — TRANSPORT.

HORSE TRAFFIC.

Mr. LOVAT-FRASER: 15.
asked the Minister of Transport whether, in view of the increased demand for heavy draught horses as being more economical than motors, and in order to encourage farmers to invest money in the breeding of horses and so to protect an industry on which thousands are dependent, he will oppose attempts to hamper or restrict the use of horses on public roads?

The MINISTER of TRANSPORT (Mr. Oliver Stanley): If proposals for restricting the use of horses on public roads came before me, I should take all circumstances relevant to the particular case into account, but I cannot make any general declaration of policy in such a matter.

RAILWAY STATIONS (NAMES).

Brigadier-General NATION: 16.
asked the Minister of Transport if he will consider the introduction of legislation whereby the names of railway stations shall be more prominently displayed and more easily recognisable by travellers than at present?

Mr. STANLEY: I have no reason to think that legislation specifically relating to the display of railway station names is required, but if my hon. and gallant Friend has in mind any case where he
thinks an improvement in this respect is called for, I will bring it to the notice of the railway company concerned.

Brigadier-General NATION: Does the hon. Gentleman know that at certain stations on the Great Northern Railway it is almost impossible to distinguish the names of the stations from the advertisements?

Mr. STANLEY: That must depend on the name of the station, the speed of the train, and the accuracy of the eye.

BRIDGES.

Mr. GUY: 17.
asked the Minister of Transport whether he, or the highway authority or the bridge authority, will be responsible for initiating and carrying out a bridge improvement scheme where a bridge carrying a road over a railway or canal is alleged to be insufficiently strong to carry the traffic using the road and has been placed on the priority list submitted to the Minister as urgently in need of reconstruction, and he has approved the proposed scheme?

Mr. STANLEY: Either the highway authority or the owner of the bridge may take the initiative, and the Bridges Act, 1929, enables agreements to be made between them for the reconstruction and improvement of dangerous or unsuitable structures.

Mr. LOUIS SMITH: Is the hon. Gentleman satisfied that sufficient progress has been made during the last two months in this respect?

Mr. STANLEY: I am not entirely satisfied with the rapidity with which the matter is progressing, but I still hope for the co-operation of local authorities.

Sir GIFFORD FOX: 20.
asked the Minister of Transport whether, in view of the fact that it has been demonstrated by those of the county conferences on weak bridges which have already taken place that the operation of Section 30 of the Road and Rail Traffic Act, 1933, will inconvenience road transport, especially in the industrial areas of the Kingdom, and that even the most expeditious programme of reconstruction of weak bridges on main roads will take at least two or three years to execute, he will state what action he proposes to
take in the meanwhile to prevent public inconvenience?

Mr. STANLEY: I would refer my hon. Friend to the answer which I gave on this subject on the 5th March to the hon. Member for Newport, Mon. (Mr. Clarry), of which I am sending him a copy. Any restrictions are bound to cause a certain amount of inconvenience, but by means of the conferences which have been held by local authorities, and my own discussions with bridge authorities, I am taking steps to reduce inconvenience to a minimum.

GREAT NORTH ROAD.

Captain SOTHERON-ESTCOURT: 19.
asked the Minister of Transport how long work has been in progress upon the alterations and improvements of the Great North Road in the vicinity of Ferrybridge; whether work is stopped at the present time and, if so, for what reason; and when this section of the road will be finished?

Mr. STANLEY: The work was commenced in September, 1930, and is complete with the exception of a small section at the northern end, which is held up pending completion of negotiations between the county council and one owner.

DOCKS AND HARBOURS (ROAD TRANSPORT).

Captain STRICKLAND: 21.
asked the Minister of Transport whether he is aware that under the Hull Dock Act of 50 years ago the Hull dock authorities are preventing road transport vehicles from entering the dock premises for the purpose of loading up; that a similar attempt to restrict road transport from using Lowestoft harbour has been prevented by a unanimous judgment on appeal to the House of Lords; and whether, in the public interest, he will take steps to put a stop to this discrimination against road transport by dock and harbour authorities?

Mr. STANLEY: I understand that the High Court decided in 1932, that the action taken by the railway company at Hull docks, to which my hon. Friend refers, did not constitute a breach of the provisions under which traders are entitled to access to the docks. In the circumstances I do not see that I can usefully take any action.

Captain STRICKLAND: Do we understand that, under a private Bill, road transport will be held up without any attempt on the part of the Government to overcome the difficulty?

TELEPHONE POSTS.

Sir G. FOX: 28.
asked the Postmaster-General whether, in view of the numerous fatal and non-fatal accidents due to the existence of telephone poles too close to highways, he will undertake in all such eases to set back the poles of which complaint is made to a limit more in accordance with public safety?

The ASSISTANT POSTMASTER-GENERAL (Sir Ernest Bennett): I am unaware of any foundation for the suggestion that numerous accidents are due to the proximity of telephone or telegraph poles to highways. The Post Office does not erect poles in dangerous positions; and when a pole already in position becomes dangerous to traffic through road-widening, or any other cause, it is set back. If my hon. Friend will let me know of any case in which he thinks that a Post Office pole is dangerously placed, I will gladly look into it.

ACCIDENT, LINSDALE (POLICEMAN'S DEATH).

Mr. T. SMITH (for Mr. THORNE): 34.
asked the Secretary of State for the Home Department whether he has received a report of a collision between a police constable, riding a cycle, and a motor car at Linsdale, Bucks, resulting in the death of the constable; whether the constable was proceeding to or from duty; and whether the accident will be covered by the Workmen's Compensation Act?

The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour): I have inquired into the circumstances of this case. The constable, a member of the Bedfordshire County Constabulary, was not on duty: he was cycling back on his rest day from a visit to a Buckinghamshire village when the accident occurred. The night was foggy, and at the inquest no blame was attached to the driver of the motor vehicle. Steps will be taken by the Bedfordshire police authority to award a pension to his widow and allowances to his children under the Police Pensions Act, 1921. The Workmen's Compensation Act does not apply to a member of a police force.

COAL INDUSTRY (ACCIDENTS).

Mr. McKEAG: 22.
asked the Secretary for Mines how many accidents have occurred to onsetters, and men and boys assisting them, during the five years up to the last convenient date, stating in how many instances such accidents have proved fatal and in how many cases have the injuries in such accidents been caused by falls down the pit shafts?

The SECRETARY for MINES (Mr. Ernest Brown): I regret that I cannot give the total number of accidents from all causes to onsetters and their assistants. I am able to say, however, that the number of such persons killed as a result of accidents in shafts during the five years ended 31st December, 1933, was 44, and the number seriously injured 56. Eighteen of these accidents (14 fatal) resulted from persons falling down shafts and 15 (seven fatal) from things falling down shafts.

Mr. McKEAG: Will the hon. Gentleman consider whether anything more can be done still further to reduce the number of these distressing accidents?

Mr. BROWN: That question is always under consideration.

AGRICULTURE (BARLEY IMPORTS).

Mr. L. SMITH: 23.
asked the Minister of Agriculture if he can state the causes explaining the largely increased imports of barley in 1933?

Captain Sir GEORGE BOWYER: I have been asked to reply. Although the imports of barley in 1933 were 57 per cent. higher than in 1932, they could not be regarded as abnormal, being only 3.6 per cent. higher than in 1931 and 5 per cent. higher than 1930. The 1933 home crop was 17 per cent. smaller than in 1932 owing to the reduced acreage, and comprised an exceptionally large proportion of barley of good quality suitable for brewing. These facts, combined with the increased demand for feeding barley in this country, explain the increase in the imports of barley of feeding quality last year.

Mr. SMITH: Will the hon. and gallant Gentleman get in touch with his right hon. Friend and give careful attention to the matter during the next few months?

Sir G. BOWYER: Certainly.

BEET-SUGAR SUBSIDY.

Sir R. HAMILTON: 24.
asked the Minister of Agriculture if he can state the market value of beet sugar produced in Great Britain in 1933 in respect of which a subsidy is payable?

Sir G. BOWYER: The average ex-factory price of refined sugar during the 1933–34 manufacturing season was 18s. 5½d. per cwt. duty paid, and on this basis the market value of the sugar produced from beet grown in Great Britain during 1933 is approximately £8,408,000.

Sir HERBERT SAMUEL: Could the hon. and gallant Member say what is the value of the sugar itself?

Sir G. BOWYER: No, I should require notice of that question.

Oral Answers to Questions — TRADE AND COMMERCE.

TURKEY (RUSSIAN CREDITS).

Sir PARK GOFF: 25.
asked the President of the Board of Trade whether he has yet obtained information as to the signing of an agreement between the Russian and Turkish Governments for a loan of approximately £8,000,000 to Turkey for the building of cotton mills and technical assistance; whether the work has been started; and whether he proposes to take any action in the matter?

Lieut.-Colonel COLVILLE (Secretary, Overseas Trade Department): It is reported in the Turkish Press that an agreement has been signed under which the Soviet Government grants a credit of eight million dollars for the purchase of machinery required for the Turkish Government's industrialisation programme. I am unable to state what proportion of this credit will be employed to finance the construction of cotton mills nor whether such construction has been begun. With regard to the last part of the question, I would refer to the reply given to the hon. Member on 28th February.

IRAQ AND PERSIA.

Sir P. GOFF: 26.
asked the President of the Board of Trade whether any business proposals have been made by Russia to Iraq and Persia or any other countries for loans for the building of
cotton mills; and whether he intends to take any action in the matter?

Lieut.-Colonel COLVILLE: Apart from the proposed credit to Turkey referred to in the reply which I have just given to my hon. Friend, I have no information as to any such proposals. The second part of the question does not therefore arise.

Sir P. GOFF: Are negotiations going on at present on this very subject?

Lieut.-Colonel COLVILLE: I have no official information on the subject, but the position will be watched.

Sir P. GOFF: Rave you any information at all?

BRITISH INDUSTRIES FAIR.

Mr. L. SMITH: 1.
asked the Secretary of State for Foreign Affairs how many words dealing with the British Industries Fair have been hitherto this year sent out in the British official wireless service from Rugby?

Sir J. SIMON: Paragraphs dealing with the British Industries Fair have been frequently transmitted by the British Official Wireless both before and during the progress of the fair. The total number of words transmitted has, I understand, been between 1,000 and 1,500.

POLAND.

Mr. LIDDALL (for Mr. GRANVILLE GIBSON): 29.
asked the Secretary to the Overseas Trade Department what are the specific objects of the visit of the Government trade delegation to Poland; and why there is no representative of the leather industry in the delegation?

Lieut.-Colonel COLVILLE: The Mission has gone to Poland for discussions with Polish industries and institutions with a view to ascertaining in what directions United Kingdom exports to Poland can be increased. It is expected that negotiations for a Trade Agreement will be undertaken shortly after the return of the Mission. The interests of the United Kingdom leather trade will be watched by the delegate nominated by the Federation of British Industries and by the officials attached to the Mission.

RUSSIA.

Mr. LIDDALL (for Mr. G. GIBSON): 30.
asked the Secretary to the Overseas Trade Department if the Government proposes to send a trade delegation to Russia to explore the possibilities of increasing our exports to that country?

Lieut.-Colonel COLVILLE: There is no such proposal at the present time.

INDIA (EARTHQUAKE).

Mr. D. GRENFELL: 27.
asked the Secretary of State for India whether the work of relief of victims of the earthquake in India is proceeding satisfactorily; and whether he will make a statement showing how the organisation is being directed?

The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): I would refer the hon. Member to the reply given last Monday to my hon. Friend the Member for Moseley (Mr. Hannon).

Oral Answers to Questions — UNEMPLOYMENT.

UNEMPLOYED MARCHERS.

Mr. TINKER: 32.
asked the Minister of Health if he has considered the request from the unemployed marchers to London to meet a deputation from them; and will he consider meeting them?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): The answer to the first part of the question is in the affirmative and to the second part in the negative. It has been explained on behalf of my right hon. Friend that, while he would be happy to receive any of his colleagues in the House of Commons, he is unable for the reasons recently given by the Prime Minister to receive such a deputation as was suggested.

Mr. TINKER: Would it not have been in the interests of the Health Department to receive those marchers who represent a body of people suffering from lack of clothing and food, and, if the Minister had heard a statement, would not he have been able to judge the need much better?

Mr. SHAKESPEARE: The right hon. Gentleman the Member for Wakefield
(Mr. Greenwood) refused s similar deputation, and presumably he thought that it was not in the interests of the Health Department either.

Mr. TINKER: Surely, what another man has done in times gone by has nothing to do with the question?

Mr. TINKER: 43.
asked the Minister of Labour if he has considered the request made to him from the unemployed marchers to London to meet a deputation from them to hear their case; and will he consider meeting them?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson): My right hon. Friend has replied that he is not able to accede to this request and in doing so he referred to the Prime Minister's letter of 23rd February, which has been published in the Press. He added that he is ready to see any Member of Parliament on the subject of the Unemployment Bill at any convenient time which can be arranged.

SURPLUS LABOUR (TRANSFER).

Mr. DICKIE: 42.
asked the Minister of Labour whether the Government has yet given consideration to the question of the transference of population necessitated by the closing of redundant shipyards, the abandonment of worked-out coal mines, and the shutting down of derelict steel works; and when he will be in a position to announce the policy of the Government regarding it?

Mr. HUDSON: My right hon. Friend is alive to the problem to which my hon. Friend refers and I may say that the transfer of surplus labour from depressed areas to those of greater industrial activity is part of the settled policy of the Government. Continuous steps have been taken to this end through the machinery of the Employment Exchanges and through the training centres. Though necessarily the amount is conditioned by the receptive capacity of the more prosperous districts a considerable amount of transfer has been effected by these means. I should add that the growth in industrial population in certain areas indicates that a redistribution of labour is taking place in addition to the stimulus afforded by Government action.

Mr. DICKIE: While I am very grateful to the Parliamentary Secretary for his reply, I would like to ask him whether, having regard to the tragic human fact of these thousands of men who will never again be absorbed into their own occupations, the Government will not consider the advisability of setting up an independent committee to consider this as a separate and independent problem?

BUILDING INDUSTRY, MANCHESTER.

Mr. HICKS: 44.
asked the Minister of Labour the number of unemployed building trade operatives who were registered at the Manchester and district sub-exchanges for the week ended 3rd March?

Mr. HUDSON: As the reply includes a table of figures, I will, if I may, circulate a statement in the OFFICIAL REPORT.

Mr. DICKIE: Has not this question some bearing on the question which I put?

Following is the statement:

Insured persons in the building industry classification recorded as unemployed at Employment Exchanges in Manchester, Salford and district at 19th February, 1934.*

Employment Exchange.
Numbers Unemployed.


Manchester
2,707


Levenshulme
252


Newton Heath
428


Openshaw
723


Trafford Park
108


Withington
315


Salford
893


Eccles
182


Pendlebury
175


*Similar figures are not available for any later date.

BRICKLAYERS, LONDON.

Mr. HICKS: 45.
asked the Minister of Labour if he is aware that Thomas Capper and Thomas Quinn, bricklayers, of Motherwell, were offered employment on the 16th February, 1934, at Willesden, 400 miles distant, and that on that date there were unemployed bricklayers in London; and whether he will inquire into the matter and state why local workmen were not employed in the interests of economy?

Mr. HUDSON: I am making inquiries and will let the hon. Member know the result.

BROADMOOR ASYLUM (VISITORS).

Mr. JOEL: 33.
asked the Home Secretary whether relatives and friends are allowed to visit inmates at Broadmoor Asylum on Sundays; and, if not, whether he will take steps to see that such permission is granted?

Sir J. GILMOUR: Visits to patients at Broadmoor are allowed on any week-day from 10 to 12 and from 2 to 4, but not on Sundays, Good Friday or Christmas Day. I recognise that in some cases relatives and friends may find difficulty in arranging to visit on a week-day, but I understand that there are practical difficulties in the way of any alteration in the existing arrangements.

POLICE CHARGE.

Mr. D. GRENFELL: 35.
asked the Home Secretary whether he will inform the House of the circumstances in which a police charge which had been recently entered at Tottenham Court Road Police Station has been suspended and forwarded to Scotland Yard?

Mr. JOHN WILMOT: 36.
asked the Home Secretary whether he has caused inquiries to be made as to why a charge regarding an offence against a police constable, made at the Tottenham Court Road Police Station about midnight on Wednesday last, has been withdrawn as a result of representations of a high official at Scotland Yard; and is any further action proposed?

Sir J. GILMOUR: Proceedings are being taken against the person who was charged in this case and until these proceedings have been disposed of it would be improper for me to make any statement, since such statement would involve comment on a matter which is sub judice.

Sir STAFFORD CRIPPS: May I ask the right hon. Gentleman whether he has ascertained whether any steps were taken by any officials of Scotland Yard to interfere in any way with the prefering of the charge by the inspector?

Sir J. GILMOUR: I am sure that the hon. and learned Gentleman, with his
knowledge of the law, will understand that it would be improper for me to answer as it would involve comment on this case.

Sir S. CRIPPS: Does the right hon. Gentleman mean then that a case of prosecution is being brought against the official at Scotland Yard for the interference?

Sir J. GILMOUR: No, Sir, and I am surprised that the hon. and learned Gentleman should put a question of that nature to me. I have nothing to conceal, and when this case is finished—as I told the House, it is sub judice—I shall answer any question any Member puts to me.

Mr. WILMOT: May I ask whether steps were taken to bring the charge before the magistrate in the appropriate court before the person who was on bail was permitted not to surrender to that bail?

Sir J. GILMOUR: I have nothing to add to what I have said.

WAR LOANS ACT, 1919.

Captain CROOKSHANK: 38.
asked the Chancellor of the Exchequer how often the Treasury have obtained power to raise money under sub-section (1) of Section 1 of the War Loans Act, 1919, by means of subsequent Acts of Parliament; on what occasions that power has been used; and whether the Government are now prepared to restore to this House its pre-War control over the creation of securities other than those issued for the service of the current financial year?

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): Power to raise money in this manner has been granted to the Treasury by Parliament on five occasions since 1919, namely by Section 21 (2) of the Finance (No. 2) Act, 1931, to provide for capital payments on account of the American Debt and for payments to the National Debt Commissioners in respect of certain securities tendered in payment of death duties; by Section 17 (2) of the same Act, to provide for the expenses and cash bonus on the conversion of the 5 per cent. War Loan; by Section 24 of the Finance Act, 1932, and the Exchange Equalisation Act, 1933, to provide for the financing of the Exchange Equalisation Account; and by
Section 35 (2) of the Finance Act, 1933, to provide for the contractual sinking fund payments in the current year. As regards the last part of the question, the essential safeguard of Parliamentary control is that the Government cannot borrow for any purpose other than the service of the current financial year or to replace maturing debt, without seeking the appropriate powers from Parliament, including Parliamentary sanction to the amount of the loan. This condition has always held good. As regards the form of the securities by which money is raised, I do not think it would have been practicable to define it more closely than in the terms of the War Loan Act.

EXCESS PROFITS DUTY (ARREARS).

Mr. AMERY: 39.
asked the Chancellor of the Exchequer whether he is aware that there are many instances in which industrial undertakings are prevented from securing fresh capital for expansion, which would give employment and yield revenue from profits, by reason of long outstanding liabilities for arrears of Excess Profits Duty which cannot be paid in full; and whether he can give instructions to the Board of Inland Revenue to afford facilities for the early settlement, on fair and reasonable terms, of such liabilities?

Mr. HORE-BELISHA: I am aware that there many cases of industrial undertakings in which arrears of Excess Profits Duty and interest thereon have been long outstanding. The Board of Inland Revenue are at present engaged in a special review of cases in which payment in full cannot be obtained, and my right hon. Friend can rest assured that any offers for an early settlement of these liabilities on a fair and reasonable basis will be very carefully considered.

INDUSTRIAL ASSURANCE.

Sir BASIL PETO: 41.
asked the Financial Secretary to the Treasury whether the Government have completed their examination of the Report of the Committee on Industrial Assurance, which was presented to Parliament in July last year; and whether they intend to introduce legislation, either to give effect to the specific recommenda-
tions of the committee or on the lines of the wider proposals indicated in paragraph 5 of the Report?

Mr. HORE-BELISHA: The report is still under examination and I am not at present able to say what action will be taken.

PUBLIC WORKS LOANS BOARD(INTEREST RATES).

Mr. MOLSON: 40.
asked the Financial Secretary to the Treasury whether, in view of the appreciation in the price of local loan stock and the importance of providing cheap money to local authorities for housing and other purposes, he will consider the desirability of lowering the rate of interest now charged by the Public Works Loans Board?

Mr. HORE-BELISHA: The position is being watched, but I am not able to make any further statement at present.

BILL PRESENTED.

WORKS COUNCILS BILL,

"to provide for the establishment of consultative works councils in factories and

Division No. 145.]
AYES.
[3.15 p.m.


Adams, Samuel Vyvyan T. (Leeds, W.)
Colville, Lieut.-Colonel J.
Gunston, Captain D. W.


Agnew, Lieut.-Com. P. G.
Cook, Thomas A.
Guy, J. C. Morrison


Albery, Irving James
Cooke, Douglas
Hacking, Rt. Hon. Douglas H.


Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)
Cooper, A. Duff
Hamilton, Sir George (Ilford)


Allen, Lt.-Col. Sir William (Armagh)
Copeland, Ida
Hannon, Patrick Joseph Henry


Amery, Rt. Hon. Leopold C. M. S.
Cranborne, Viscount
Harbord, Arthur


Baldwin, Rt. Hon. Stanley
Crooke, J. Smedley
Hartland, George A.


Balfour, Capt. Harold (I. of Thanet)
Crookshank, Col. C. de Windt (Bootle)
Harvey, Major S. E. (Devon, Totnes)


Beauchamp, Sir Brograve Campbell
Crookshank, Capt. H. C. (Gainsb'ro)
Haslam, Sir John (Bolton)


Beaumont, Hon. R. E. B. (Portsm'th. C.)
Crossley, A. C.
Headlam, Lieut.-Col. Cuthbert M.


Beit, Sir Alfred L.
Davies, Maj. Geo. F. (Somerset, Yeovil)
Hepworth, Joseph


Bennett, Capt. Sir Ernest Nathaniel
Denville, Alfred
Hornby, Frank


Bernays, Robert
Dickie, John P.
Horobin, Ian M.


Boothby, Robert John Graham
Doran, Edward
Horsbrugh, Florence


Borodale, Viscount
Drewe, Cedric
Howitt, Dr. Alfred B.


Bowyer, Capt. Sir George E. W.
Duckworth, George A. V.
Hudson, Capt. A. U. M. (Hackney, N.)


Boyd-Carpenter, Sir Archibald
Dugdale, Captain Thomas Lionel
Hudson, Robert Spear (Southport)


Brass, Captain Sir William
Duggan, Hubert John
Hunter, Dr. Joseph (Dumfries)


Broadbent, Colonel John
Duncan, James A. L. (Kensington, N.)
Hurd, Sir Percy


Brocklebank, C. E. R.
Dunglass, Lord
Hurst, Sir Gerald B.


Brown, Col. D. C. (N'th'l'd., Hexham)
Eden, Robert Anthony
Jamieson, Douglas


Brown, Ernest (Leith)
Edge, Sir William
Joel, Dudley J. Barnato


Browne, Captain A. C.
Edmondson, Major A. J.
Jones, Lewis (Swansea, West)


Bullock, Captain Malcolm
Elmley, Viscount
Ker, J. Campbell


Burgin, Dr. Edward Leslie
Fleming, Edward Lascelles
Kerr, Hamilton W.


Burnett, John George
Fox, Sir Gifford
Keyes, Admiral Sir Roger


Cadogan, Hon. Edward
Gault, Lieut.-Col. A. Hamilton
Latham, Sir Herbert Paul


Caporn, Arthur Cecil
Gilmour, Lt.-Col. Rt. Hon. Sir John
Law, Sir Alfred


Carver, Major William H.
Gledhill, Gilbert
Law, Richard K. (Hull, S. W.)


Cautley, Sir Henry S.
Glossop, C. W. H.
Leech, Dr. J. W.


Cayzer, Sir Charles (Chester, City)
Glyn, Major Sir Ralph G. C.
Leighton, Major B. E. P.


Cayzer, Maj. Sir H. R. (P'rtsm'th, S.)
Goff, Sir Park
Levy, Thomas


Gazalet, Thelma (Islington, E.)
Goodman, Colonel Albert W.
Lewis, Oswald


Christie, James Archibald
Graham, Sir F. Fergus (C'mb'rl'd, N.)
Liddell, Walter S.


Churchill, Rt. Hon. Winston Spencer
Gretton, Colonel Rt. Hon. John
Lindsay, Kenneth Martin (Klim'rnock)


Clarke, Frank
Grimston, R. V.
Lindsay, Noel Ker


Cochrane, Commander Hon. A. D.
Guinness, Thomas L. E. B.
Lloyd, Geoffrey

workshops for the consideration of various matters of mutual concern to employers and employed persons and for other purposes relating thereto," presented by Mr. Mander; supported by Mr. Bernays, Mr. Dingle Foot, Mr. Kingsley Griffith, Sir Percy Harris, Major Nathan, and Mr. Graham White; to be read a Second time upon Tuesday next, and to be printed. [Bill 73.]

BUSINESS OF THE HOUSE.

Mr. ATTLEE: May I ask the Lord President of the Council how far it is proposed to go with business to-night?

The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): We hope to obtain the first five Orders on the Order Paper. We also hope to get the Report stage of three Money Resolutions which passed through the Committee stage last night.

Motion made, and Question put,
That the Proceedings on Government business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[Mr. Baldwin.]

The House divided: Ayes, 205; and Noes, 48.

Lovat-Fraser, James Alexander
Peake, Captain Osbert
Somerville, Annesley A. (Windsor)


Lumley, Captain Lawrence R.
Pearson, William G.
Sotheron-Estcourt, Captain T. E.


MacAndrew, Lieut.-Col. C. G. (Partick)
Peat, Charles U.
Southby, Commander Archibald R. J.


MacAndrew, Capt. J. O. (Ayr)
Peters, Dr. Sidney John
Spencer, Captain Richard A.


McCorquodale, M. S.
Peto, Sir Basil E. (Devon, Barnstaple)
Spender-Clay, Rt. Hon. Herbert H.


MacDonald, Malcolm (Bassetlaw)
Pownall, Sir Assheton
Spens, William Patrick


McEwen, Captain J. H. F.
Radford, E. A.
Stanley, Rt. Hon. Lord (Fylde)


McKeag, William
Raikes, Henry V. A. M.
Stanley, Hon. O. F. G. (Westmorland)


Macpherson, Rt. Hon. Sir Ian
Ramsay, T. B. W. (Western Isles)
Stones, James


Magnay, Thomas
Ramsbotham, Herwald
Strickland, Captain W. F.


Maitland, Adam
Rankin, Robert
Sueter, Rear-Admiral Sir Murray F.


Makins, Brigadier-General Ernest
Reid, William Allan (Derby)
Sugden, Sir Wilfrid Hart


Manningham-Buller, Lt.-Col. Sir M.
Rickards, George William
Tate, Mavis Constance


Margesson, Capt. Rt. Hon. H. D. R.
Robinson, John Roland
Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)


Martin, Thomas B.
Rosbotham, Sir Thomas
Touche, Gordon Cosmo


Mills, Sir Frederick (Leyton, E.)
Ross Taylor, Walter (Woodbridge)
Tree, Ronald


Mills, Major J. D. (New Forest)
Runciman, Rt. Hon. Walter
Tufnell, Lieut.-Commander R. L.


Mitchell, Sir W. Lane (Streatham)
Russell, R. J. (Eddisbury)
Wallace, Captain D. E. (Hornsey)


Molson, A. Hugh Elsdale
Rutherford, John (Edmonton)
Ward, Lt.-Col. Sir A. L. (Hull)


Monsell, Rt. Hon. Sir B. Eyres
Rutherford, Sir John Hugo (Liverp'l)
Wardlaw-Milne, Sir John S.


Morris-Jones, Dr. J. H. (Denbigh)
Salmon, Sir Isidore
Whiteside, Borras Noel H.


Morrison, William Shephard
Samuel, Sir Arthur Michael (F'nham)
Wills, Wilfrid D.


Moss, Captain H. J.
Sandeman, Sir A. N. Stewart
Wilson, Lt.-Col. Sir Arnold (Hertf'd)


Muirhead, Lieut.-Colonel A. J.
Scone, Lord
Wilson, Clyde T. (West Toxteth)


Nation, Brigadier-General J. J. H.
Shakespeare, Geoffrey H.
Windsor-Clive, Lieut.-Colonel George


Nicholson, Godfrey (Morpeth)
Shaw, Helen B. (Lanark, Bothwell)
Winterton, Rt. Hon. Earl


Nicholson, Rt. Hn. W. G. (Petersf'ld)
Shepperson, Sir Ernest W.
Wise, Alfred R.


Nunn, William
Simon, Rt. Hon. Sir John
Womersley, Walter James


Oman, Sir Charles William C.
Skelton, Archibald Noel
Worthington, Dr. John V.


Ormsby-Gore, Rt. Hon. William G. A.
Smith, Louis W. (Sheffield, Hallam)



Palmer, Francis Noel
Smith, R. W. (Ab'rd'n & Kinc'dine, C.)
TELLERS FOR THE AYES.—


Patrick, Colin M.
Somerset, Thomas
Sir Frederick Thomson and Sir




Victor Warrender.




NOES.


Acland, Rt. Hon. Sir Francis Dyke
Hicks, Ernest George
Paling, Wilfred


Attlee, Clement Richard
Holdsworth, Herbert
Parkinson, John Allen


Banfield, John William
Janner, Barnett
Price, Gabriel


Batey, Joseph
Jenkins, Sir William
Rea, Walter Russell


Buchanan, George
Johnstone, Harcourt (S. Shields)
Roberts, Aled (Wrexham)


Cape, Thomas
Jones, Morgan (Caerphilly)
Samuel, Rt. Hon. Sir H. (Darwen)


Cripps, Sir Stafford
Kirkwood, David
Smith, Tom (Normanton)


Daggar, George
Lawson, John James
Tinker, John Joseph


Davies, David L. (Pontypridd)
Leonard, William
Wedgwood, Rt. Hon. Josiah


Davies, Rhys John (Westhoughton)
Logan, David Gilbert
White, Henry Graham


Dobbie, William
Lunn, William
Williams, David (Swansea, East)


Edwards, Charles
Macdonald, Gordon (Ince)
Williams, Edward John (Ogmore)


Evans, R. T. (Carmarthen)
Maclean, Nell (Glasgow, Govan)
Williams, Dr. John H. (Llanelly)


Foot, Isaac (Cornwall, Bodmin)
Mainwaring, William Henry
Wilmot, John


Grenfell, David Rees (Glamorgan)
Mander, Geoffrey le M.



Hall, George H. (Merthyr Tydvil)
Mason, David M. (Edinburgh, E.)
TELLERS FOR THE NOES.—


Hamilton, Sir R. W. (Orkney & Zetl'nd)
Maxton, James
Mr. John and Mr. D. Graham.

SOUTH METROPOLITAN GAS (No. 1) BILL.

Reported, without Amendment; Report to lie upon the Table.

ASSESSOR OF PUBLIC UNDERTAKINGS (SCOTLAND) BILL [Lords].

Read the first time; to be read a Second time upon Monday next, and to be printed. [Bill 74.]

Orders of the Day — NORTH ATLANTIC SHIPPING BILL.

Order for Second Reading read.

3.25 p.m.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): I beg to move, "That the Bill be now read a Second time."
In December, 1930, the Cunard Company, in pursuance of a considered policy designed to maintain their outstanding position on the Atlantic, decided to lay down a ship which in size and speed was unlikely to be excelled by any other in existence or in contemplation. It was to be of 75,000 tons gross, the largest ship afloat, and of such a speed as to maintain a programme of fortnightly sailings across the ocean during the year, which no other service can at present provide. The news was received with general satisfaction because it showed that it was the intention of this company to meet the challenge offered to it by other nations who were known to be desirous of outstripping us in our old supremacy. There was another reason why the announcement caused rejoicing. The laying down of this ship meant an expenditure of £4,500,000. This was to open the gates to some 3,500 shipbuilders, and to keep them in occupation for three years. It was not only on the Clyde that the benefits would be felt, but throughout the realm, in a large diversity of trades, men were to be engaged in making machinery and equipment—a vast diversity of trades.
It was with general consternation that the public learned a year later that credit difficulties had arisen and that progress had to be abandoned. It was universally felt to be a matter of concern not only to the company but to the nation that a project involving livelihood on so broad a scale and so closely associated with our predominance should be frustrated. The Government were pressed from all quarters in Parliament and from all denominations of the Press outside to come to the assistance of the company. Members of all parties pleaded with my right hon. Friend. Under the leadership of the right hon. Member for Hillhead (Sir R. Horne) hon. Members here outside the Government advocated such a course, and from the benches
opposite the arguments were reinforced. Perhaps their views are best indicated by a quotation which I may be permitted to make from a speech delivered by the hon. Member for Bridgeton (Mr. Maxton) who always sees these national matters in perspective with a keen insight. He said:
To us, the great maritime nation of the world, the greatest shipbuilding nation of the world, the fact that we should stop operations in such a way on this mammoth liner, which has attracted the eyes of shipping people throughout the world, will be a deadly blow which will have much wider repercussions."—[OFFICIAL REPORT, 10th December, 1931; col. 2185, Vol. 260.]
He also said with equal truth, and I am glad that his request is now being met:
This is precisely the type of problem with which the National Government are supposed to deal, a money problem to make it possible to carry on the ordinary business and industrial operations of the country, to make the necessary sinews of war available for industry."—[OFFICIAL REPORT, 10th December, 1931; col. 2184, Vol. 260.]

Mr. MAXTON: Is there anything about £9,500,000 in that terrifying speech?

Mr. HORE-BELISHA: Surely the hon. Gentleman is not going to detract from his own eloquence now that it has had effect?

Mr. MAXTON: Too much effect.

Mr. HORE-BELISHA: We were petitioned on all grounds—on humane grounds, because of those whose trades were at stake, we were told that if it were intended to encourage any form of public works this was no fruitless relief undertaking but reproductive. We were begged on national grounds to aid the work, and the precedent of 1904 was quoted, when £2,600,000 was advanced to the same company by the Treasury on similar security, when the "Lusitania" and "Mauretania" were built. It is instructive to look back upon those Debates. The hon. and gallant Member for Gainsborough (Captain Crookshank) and the hon. Member for Gorbals (Mr. Buchanan) had their less eloquent predecessors. We were told, or that generation was told, that the policy of the big ship, the mammoth luxury liner, was misconceived, that the finance was uneconomic and that loss to the taxpayers was inevitable. The policy of the big ship, however,
prospered; finance proved to be well secured; the taxpayers have lost nothing. The interest has been duly met and the capital has been refunded in full.

Mr. BUCHANAN: Where?

Mr. HORE-BELISHA: It was in these circumstances that my right hon. Friend the Chancellor of the Exchequer was called upon to examine the suspension of this ship, the 534, and the plea for succour. What, if anything, could be done? He had to see that if aid were brought the money would not be wasted and that the course would be set fair for making a success of the risk. He came to the conclusion that if the problem were to retain the ascendancy of Britain on the Atlantic, ruinous competition between British firms should be eliminated as being a hindrance to the main objective, and that all our resources, skill and experience should be concentrated in one single channel. Therefore, he made it clear that financial assistance could be forthcoming only if the effective fusion of the North Atlantic shipping interests of the two rival companies were to take place.
Negotiations upon such a subject were complicated, and they have been long. Praise is due to those who have now brought them to the point of achievement. The merger company is, therefore, subject to the Vote of this House, to be formed upon the express condition that it shall be and shall remain British. My right hon. Friend's conditions are thus fulfilled. He made no secret of the conditions or of the plan which he had in view. He informed the House of Commons at every stage. The Government have concluded that what is to be done should be done in a sufficient manner. The merger company will be in possession of £3,000,000, payable as required, for the completion of the 534, and £1,500,000, payable as required, for working capital. If the money be not required it will not be drawn. But whatever be required within that total will be at the disposal of the merger company in order that it may do its business without apprehension or embarrassment.
I can understand those who may say that it is no concern of the nation that we should maintain our supremacy on the Atlantic, but, having decided to do it, I
cannot understand the contention of my hon. Friend the Member for Gravesend (Mr. Albery), who says that the working resources of the company should be restricted. By a similar policy of giving the new enterprise an opportunity to justify the confidence we place in it, we do not withhold the possibility of assisting in the construction of a further ship or ships; and I would remind my hon. and learned Friend the Member for Central Nottingham (Mr. O'Connor) that the company could not maintain the service required without an addition to its fleet. The company would never have been formed, or would never be formed, except upon such an understanding.
Those are the arrangements, and the agreement is before the House. From the moment the suspension of work upon this vessel was announced to the time when the Financial Resolution was taken, no word of protest was uttered, although my right hon. Friend had made plain exactly what it was he was seeking. On the contrary, relief was expressed as the conclusion of the negotiations drew nearer and the prospect of a resumption of work became more imminent. We are now, however, confronted with an Amendment which complains that the devotion of money to private interests is unaccompanied by any guarantee as to its repayment. I invite hon. Gentlemen who make that complaint to read the agreement. There can, of course, be no absolute assurance that when you lend money it will be repaid. But one can obtain security. Here is a ship costing £4,500,000 to build, and in respect of which we are to have prior charges for £3,500,000. In addition, we have a charge on the assets of the Cunard Company for £1,000,000, and a charge on any sums allocated by the merger company to the depreciation of the 534.
Of course, whatever the security—and that I submit is adequate security—the prosperity of the company is the best and the only ultimate safeguard, and we are sparing nothing to ensure that success. The Amendment further says that we are to have no share of the profits. Here again is a misconception. We are not only to receive interest on our first charges, but on our second charges we are to rank ahead of the shareholders against the profits. On our first deben-
tures in the merger, of £1,750,000, we are to receive interest at one-half per cent. below Bank Rate until 1940 and thereafter at such rate as is applicable to loans guaranteed by the Government. With regard to the rest of our advances on the £1,000,000 Class A Income Debentures, we are to receive 3 per cent. until December, 1939, and 5 per cent. thereafter. After these sums have been paid, and not until these sums have been paid, the shareholders are to receive a 3 per cent. dividend. Any remaining profit is then divided between the Treasury and the shareholders in proportion.
Further, if on the average the Treasury receives more than the full amount of the stipulated interest the surplus is to go to the redemption of these Income Debenture Stocks. In those circumstances, how can the hon. Gentleman opposite say that we have no share in the profits? All these charges in respect of interest are prior obligations of the company, and rank against the profits ahead of the shareholders. I think therefore it is the duty of the hon. Gentleman who is to follow me to withdraw that sentence from his Amendment. In any event, we are not shareholders in the company in respect of the money that we are advancing. We are lenders on mortgage, and mortgagees do not take out of a company more than the amount they have lent plus interest.
I now come to the third misconception of the hon. Gentleman, and that is that we have not adequate control. It is not the duty of a mortgagee to manage the affairs of a company as the Amendment suggests. Our control lies in the memorandum and articles of association which we have to approve, and in our control over the payment of the money which is to be devoted, and certified as devoted, to the purposes for which Parliament has voted it. I prefer to agree with the right hon. Gentleman the Leader of the Opposition who said that the company knew its own affairs best, and we do not intend to run a shipping company.
But the real gravamen of the Amendment is the objection that we have advanced money to private interests without nationalising them. That argument is a little belated coming from hon. Gentlemen opposite. When they advanced money or guaranteed money under the
Trade Facilities Acts they did not make the nationalisation of the industries benefiting a condition. They even went so far during their last term of office as to pass an Act of Parliament under which we are committed to advance £11,000,000 to private interests, no less than £7,000,000 being to the railways, and hon. Gentlemen will observe that the railways are not yet nationalised. Therefore, their plea that we should accompany these advances of money with a stipulation as to nationalisation comes a little late in the day.
Whatever the merits of that particular nostrum may be it does not require very close consideration of the subject to realise that the nationalisation of the shipping industry would be involved in intricacies and complications, and the only effect of carrying the Amendment would be to delay the progress of this and a great deal of other work. It is because the policy of His Majesty's Government is to bring aid and bring it quickly; is to centralise our North Atlantic activities and to centralise them now, is to give employment and to give it now, that I ask for the Second Reading of this Bill. The resumption of work on this ship will be a symbol of our determination not to yield, whatever the obstacles, our rightful place on the Atlantic Ocean, and it is but one further instance of the Government's co-operation in the revival of British industry.

3.46 p.m.

Mr. MORGAN JONES: I beg to move to leave out from "That" to the end of the Question, and to add instead thereof:
whilst anxious to assist in providing employment and prepared to welcome the resumption of work upon vessel No. 534, this House takes exception to a proposal to vote public money for the promotion of private shipping interests without any guarantee as to its repayment and without conditions for securing public control over its disbursement, a share in any profits which may accrue, or the ultimate conversion of the shipping industry into a national undertaking.
I listened with very great interest to the speech of the Financial Secretary to the Treasury. I hope he will forgive me for saying that I was a little disappointed with his defence of the financial implications of this Bill. He put to me a series of questions which I did not find in any way disturbing, and I daresay it was easier for him to propound a certain
number of propositions to me, than to answer the propositions that have been addressed to him, and will yet be addressed to him in respect of what this Bill involves. The hon. Gentleman properly reminded us that this is not entirely a new proposition. As a matter of fact to get this proposal into its proper setting we ought to go back to 1930 when the Cunard Insurance Agreement Act was passed. Hon. Members will recall that that Act was concerned with insurance and insurance only. On that occasion the House was invited by the then Government, of which I was a humble member, to undertake heavy constructional and other insurance risks for this simple reason. We were assured that the insurance market could not undertake so grave and widespread a risk as was involved in insuring the construction of those ships.
The then Government however did not undertake the whole of the insurance. They rather made themselves responsible for that part of the insurance which was not taken up by the insurance market itself. Criticisms were advanced on that occasion which many hon. Members here present will easily recall. Without going into my own views, one way or the other, in regard to the arguments then advanced, I may recall that there were those who contended that an exceptional privilege was being extended to the Cunard Company. In response to that argument, there was the contention that the circumstances were exceptional, as indeed they were, and that the depression prevalent at the time justified exceptional provision being made. We were also assured that only insurance stood in the way of the construction of this ship. That is very material to our discussion to-day. We, the Government of the day, were invited to undertake that responsibility regarding insurance, after all, because private, or shall I say capitalist, concerns were unable to shoulder the burden entirely themselves. The Government therefore undertook a share of responsibility in regard to insurance, and about a year later, I think I am right in saying, though I confess I have not been able to put my hand on the exact quotation, the Cunard Chairman, I think in an interview, used words like these:
We will finish the ship ourselves. There is no doubt about that.
I have not the faintest doubt that that was their deliberate and honest intention at the time. We must admit that if a private company had undertaken the construction of a big ship of this sort they would, it is clear to everyone, have embarked upon a very big undertaking. It would have been a very courageous act on the part of any company, and to deny that would be to deny the obvious. Work actually did begin, as the House will recall, upon the ship, and then for some reason or other it suddenly stopped, and, as the Financial Secretary rightly said, the whole country at the time of the stoppage of the work was simply staggered at the information. The hon. Gentleman said to-day that the difficulties in the way were credit difficulties, and although that was true at the time, I should have some difficulty in believing that there are not adequate sums of money available to-day in the money market. Everyone knows that there are vast sums of unemployed money as well as vast numbers of unemployed people in this country, and it must be, therefore, not a shortage of money that occasions the continuation of the stoppage, but some other reason. I see the Prime Minister in his place, and perhaps he will recall that in December, 1931, he wrote a letter to my hon. Friend the Member for Plaistow (Mr. Thorne). I have the exact quotation from his letter, in which he said:
The trouble over this ship, however, is not to get her built, but to get the company to believe that when she is built she can be run with some chance of paying her way. There would be no, difficulty in getting money for building if there were any prospect at the moment of getting the interest repaid and the loan refunded.
The hon. Gentleman the Financial Secretary put me some questions, at least by implication, and I retort to him now: In submitting this proposal to the House, has he assured himself that he can now tell the House that the interest will be repaid and the loan refunded without any shadow of doubt whatsoever? After all if he is not able to assure us of that, then we are undertaking in a very large measure a gamble. Let us look at the prospect of this return. Two or three well-known facts must be kept in mind in our consideration of this matter. First, there is the staggering fact of declining traffic—really staggering. I have been
Consulting this morning Brassey's "Naval and Shipping Annual" for 1933, and I give two or three figures to the House just to make it aware of the exact degree of this decline in traffic. In 1922 the number of first-class passengers to North America was 80,555, and in 1931 they had declined to 62,963; second-class passengers had declined from 204,000 odd in 1922 to 88,000 odd in 1931; and third-class passengers had declined from 284,000 odd in 1922 to 113,000 odd in 1931, a decline in the total from 570,000 odd to 265,000 odd. There we have one fact that has a very serious bearing upon the prospect of this experiment being successful financially.
The next point that I want to make is that there is a tremendous competition in this kind of mercantile effort. Everybody knows that France has built enormous ships, that Italy and Germany have enormous ships built, that the Canadian Pacific Railway has a big ship built, and that the "Leviathan," belonging to the United States, is also competing for this very seriously declining North Atlantic traffic. That is another element in the consideration of the matter. A propos of this particular company, let me make this point clear: The Cunard chairman, addressing the shareholders in April, 1932, said that passenger traffic had reached low figures unexampled in a quarter of a century, and a similar state of affairs applied to freights, though not to the same degree. I believe it is true that the gross revenue of the Cunard Company dropped in 1930 by £1,480,000, in 1931 by £2,321,000, and in 1932 by £670,000, a drop of nearly £4,500,000 in gross revenue as compared with 1929. That is an element in the consideration whether this is likely to be a successful venture or otherwise.
There is another fact to be kept in mind. I believe it is true that the Cunard Company itself has a large number of ships that have been engaged in the North Atlantic trade that are at this moment not in employment, and as a consequence some of the larger ships have been diverted to cruises in parts of the world away altogether from the North Atlantic. I cite these points in order that we might get this proposition, as it seems to me, in proper perspective. These are very uncomfortable facts indeed, facts in which none of us takes any delight whatsoever. We should all be glad to be
able to say, "Thank heaven, the Cunard Company is doing well and is prosperous. Thank heaven, the North Atlantic trade is booming." We should be very glad to be able to rely on such facts, but if those uncomfortable facts were not present, probably the Government would not be asked to make a contribution in the way that they are asked to do to-day.
In spite of the gloomy facts that I have just adduced, however, it may yet be arguable that as against those two considerations, two others are worth weighing in the balance; and they were cited by the hon. Gentleman who introduced the Bill. One is that the construction of the ship and its contribution to employment must be put on the other side of the balance-sheet. That is undoubtedly true, and I confess frankly that I cannot recall anybody in this House having raised a voice against this proposal, because naturally we are all of us exceedingly anxious to see some contribution made to the removal of unemployment in any part of the country. If we are assured that 5,000 or 8,000 people can get employment, that naturally makes an immediate appeal to our minds and hearts. I am sorry my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood) is not in his place at the moment. As the whole House knows, he has devoted himself with a great intensity to this business of trying to secure the recommencement of this work in his constituency. I am bound to add that we as a party must look at it, perhaps, not purely from a constituency point of view, but from a national point of view, though my hon. Friend would have been doing less than his duty as a Member of Parliament if he had not directed attention to the claims of his constituency.
But the consideration of employment must be put on the other side of the balance-sheet, and there are ancillary trades which will be favourably affected by this proposal. Then there is the other point which the hon. Gentleman put, namely, that of national prestige. It is true that you cannot estimate that in pounds, shilling and pence. We are all very anxious, and would be delighted to know, that our own nation was retaining her priority as mistress of the sea, as it were; but however keen we may be about our nation retaining the blue riband of the sea, we must not be
indifferent—I put it no higher than that—to those other considerations which must be present to our minds. I will finish with the first part of my Amendment by saying that we are all agreed whole-heartedly with the Government in regard to anything they may do by way of fostering employment in any part of the country. That is not the ground of our objection. We are entirely at one with them there.
I come to the second part of my Amendment, and devote myself a little more closely to the point which the hon. Gentleman made. A year ago the Cunard Company wrote to its shareholders in a communication to this effect. It said that during the post-War years 1919 to 1930, depreciation to the extent of £15,000,000 odd has been written off the Cunard Company's own ships. In the case of subsidiary companies figuring in the Cunard Company's balance-sheet the depreciation has been on similar lines. During the post-War years the depreciation written off by the subsidiary companies has amounted to £16,000,000 odd. Thirdly, it said that between the years 1919 and 1930 the Cunard Company and its ancillaries have paid more than £6,000,000 in Income Tax. Those are the Cunard Company's own statements. In addition to that, undoubtedly it paid heavy Excess Profit Duty, and I know that it has paid very good dividends in that time. I would also ask the hon. Gentleman whether I am right or wrong in supposing—I have little to go upon except the presumption that this company has done what every other company does—that, as a result of years of very successful business which proceeded more recent years, the Cunard Company has built up a substantial secret reserve? If so, has the Treasury satisfied itself that this reserve fund could not have been drawn upon more substantially to relieve the Government of some part of the responsibility which they have accepted?
I turn now to the provisional agreement itself. The hon. Gentleman said, quite rightly, that £3,000,000 is to go to complete the building of No. 534, £1,500,000 for the new Merger Company for working capital, and £5,000,000, if the Government and the company so agree, to build another ship or ships later. We have already insured under
the 1930 Act of Parliament. Now we are called upon to pass on to the next step, that is, having accepted insurance liabilities, we are invited to take a larger share in the actual task of construction as a second step, while £1,500,000 is to be devoted for working capital for that purpose. Now as to securities—I am hurrying through this, because I do not want to delay the House unduly—there is £1,000,000 in debentures of the Cunard Company, £6,750,000 in debentures of the Merger Company, £1,000,000 income Debenture Stock A of the new Merger Company and £750,000 of stock B of the new Merger Company, making £9,500,000 altogether. We are told that the £1,000,000 which I first mentioned is to be issued to the Government at par value, but the Cunard shares do not command par value at this moment. They are secured by mortgages on the Cunard Company's ships, but 15 of that company's ships are to be handed over to the new Merger Company, and those, I believe, are the biggest and the best of the Cunard Company's ships. They are to be handed over free of encumbrances to the new Merger Company. In that case, what is to be the effect upon the shares of the Cunard Company when the ships are transferred?

Mr. ALBERY: Does not the hon. Member mean debentures?

Mr. JONES: Yes, I am sorry if I did not make that clear. It seems to me to be obvious that the debentures cannot be at par value. They will be depreciated by it. As regards the debentures and stock to be issued by the new Merger Company, no one knows what the capital of the new Merger Company is going to be, or the value of the 15 ships to be taken over, or the value of the 10 White Star ships to be taken over. So that you are in the position of talking about a new company, the value of the actual assets of which you do not know. There may be some understanding in private, but, so far as this House is concerned, we do not know. Let us remember that many of these ships have been built some years. Take the "Mauretania." She is now 26 years old. [An HON. MEMBER: "Twenty-six years and two weeks!"] I will leave out the two weeks. Clearly a ship of that sort must be approaching the end of her useful age. She must be
approaching the scrapping point. Therefore, while some of the ships are good, others are negligible from the point of view of the present North Atlantic trade.
May I carry this point a little further. With regard to the £1,000,000 of debentures of the Cunard Company and the £6,750,000 debentures of the new Merger Company, this is the position. Up to 1st January, 1940, the interest will be one-half per cent. below the Bank of England discount rate from time to time in force—not the present one, of course; but, whatever that rate may be from time to time, the interest will be one-half per cent. below it. At the present time, I believe, it is 2 per cent. On £1,000,000 worth of Debenture Stock A, it is to be 3 per cent. up to 31st December, 1939, and 5 per cent. thereafter; but it is only payable, as I understand—I speak subject to correction—if the Merger Company makes a profit sufficient to pay it, and it is entirely contingent upon the earnings of the new company. I have submitted to the House already that the earnings of the company are dependent upon our being able to secure a larger share of a rapidly declining trans-Atlantic traffic as things are now. Of course, there may be an improvement in the coming years, but no one anticipates for some years to come, if at all, a revival of the vast traffic that used to prevail. The third-class emigrant traffic has pretty well gone for many years to come, and the only traffic for which you can compete is a slight increase for some years in second-class, cabin or first-class traffic as the case may be. On the basis of those, shall I say, fortuitous earnings, we are secured in regard to the Merger Company.
I have nearly finished what I have to say upon this matter. I have tried to be as restrained as possible. I frankly confess that I can see the difficulties of the Government. I can see that the Government wanted to help, as far as they could, employment. I can see that our national prestige was a matter of vital importance, and incidentally it may have implications at large for everybody. I want to reassert that we are exceedingly anxious to assist employment in the engineering and shipping industries. But this method, I submit, is open to serious objections. It takes great risks, with no means of safeguarding ourselves against them. Let us hope that it will not
happen, but suppose that in the coming years this traffic does not increase. We know that very big ships are already on the sea equally well appointed with the new ship that is proposed. There is the "Ile de France," of France; the "Rex" and the "Savoia," of Italy; the "Bremen" and "Europa," of Germany; and a new ship being built by a French company, the "Normandie"; all of which are competitive. Suppose we do not get this very much larger share of the traffic, is it not inevitable that this company will not be able to make both ends meet, and that we risk, shall I say, £5,000,000 or £9,000,000 as the case may be, and shall we not be induced, because we have invested this money, to throw other good money after what we regard as already bad?
We shall be committed, I fear, to further subsidies, and it is that to which I very much object unless—and I make my last point—the Government have some larger share in the directive policy and control. The hon. Gentleman thought I was asking for something which was unique and unusual. We are going to vote into this business £9,500,000 without any word at all in the policy of the company. We are entirely in their hands. We may even be involved in the coming years in a new call for subsidies in order to save the money we have invested. It is fair that the Government should now ask for its proper place on the board of directors so that they will know precisely in what direction this company is going and know in advance at what point to stop financial aid when the ship has been built. A friend of mine called my attention this morning to an aspect of the matter which I had not seen. In order to put the point clearly, I will read from his private letter:
Another serious question which I do not think the public, and more particularly the taxpayer, realise is that in the formation of the new organisation, Cunard White Star Line, the 38 per cent. allotted in this organisation to the White Star Line interests is not in the possession of Britons but belongs to the International Mercantile Marine Company of the United States to which organisation some £2,350,000 plus several years of interest is still due in connection with the purchase of the White Star Line from that organisation some years ago by the Royal Mail Steam Packet Company. Consequently this large foreign interest in the new organisation will prevent it being regarded as a British com-
pany while over and beyond this, while the present holding of 38 per cent. is in the hands of a friendly co-operative organisation, such as the International Mercantile Marine Company, that company may find it necessary to dispose of this holding, and if same should be sold by it to some foreign country, say Japan, Germany, etc., that would be the position and how would the taxpayer feel in reference to his national line?
I do not know what the answer to this communication will be, but it is material from the point of view of the speech made by the Financial Secretary apropos of subsidies. The Cunard Chairman, addressing the shareholders two years ago on the 6th April, 1932, said:
The Cunard Company is not yet forced to ask for Government help to run its existing ships on its trans-Atlantic service, but it is obvious that if its main competitors have treasuries as their bankers this will eventually become inevitable unless the Government solves the problems in the background for which they and they alone are responsible, and so restore profitable intercourse.
That is an indication of a forthcoming demand in certain eventualities for subsidies not only for these new ships, but for existing ships as well. It is a policy which we view with some apprehension, and I can only invite the Government to remove, if it is possible, those misgivings which we honestly entertain concerning the financial implications of the policy they have presented to us this afternoon.

4.19 p.m.

Sir ALFRED BEIT: I rise to support the Bill. When the right hon. Gentleman the Chancellor of the Exchequer announced some months ago that the Government were prepared to help in the completion of No. 534, I asked whether the proposals would include any reference to the question of building a sister ship, for I felt at the time that more than one new ship would be needed for keeping up a regular service with the United States to compete successfully with the lines operated by other countries. I was invited to wait and see, and in the interval I have had some conversations with the representatives of various shipping companies, both British and foreign, which had large interests in the North Atlantic traffic. These conversations have brought to light very interesting facts, the conflicting nature of which have rather weakened the con-
viction I formerly held that the immediate—I do not mean ultimate, but the immediate—construction of a second ship is necessary. It is not surprising perhaps that such varying opinions should be held when one bears in mind the great differences between countries operating North Atlantic services. Not the least of these differences is the geographical position of each country, the regularity of their services with the United States being directly dependent on the distance from New York.
By this argument, Italy is the country most affected. The fine new Italian ships, the "Rex" and the "Conti di Savoia," to which reference has been made by the hon. Member for Caerphilly (Mr. M. Jones), maintain between them a fortnightly service to New York, and though present traffics hardly seem to warrant the belief, it was considered that a monthly service, which was the most that one boat could maintain from Italy, was not sufficient. I believe that the principal reason for this contention lies in the fact that shipping companies are anxious to secure return passengers as a guarantee of traffic; but the average traveller will not purchase a return ticket if he has to run the risk of waiting a month before he can be brought home by the same company that took him out. These two ships, which are the newest on the ocean to-day, are attracting the cream of the traffic, such as it is, but they are not paying. This is hardly surprising in view of the fact that the Italian Government advanced the money for their construction at 7½ per cent. interest as opposed to a rate varying from 1½ per cent. to 3 per cent. in the present Bill. The North German Lloyd has two well-known express lines—the "Bremen" and the "Europa"—which I understand were built without direct Government assistance. They are about the same size and speed as the Italian ships and maintain a 10 days' service in each direction.
The fact remains that only from England and France would it be possible to maintain a weekly express service with two ships of this speed. The "Bremen" and "Europa" which have been and still are deservedly popular, have suffered naturally very much from the slump, the effect of which has been that neither of them has been full on any voyage for the
last three years. Yet the company assured me that their experience shows that the aggregate takings of the two ships, in proportion to their cost, is higher than the takings of one. On the other hand, the experience of the Canadian Pacific Company is quite the contrary. I was told by that company that the "Empress of Britain" has never failed to pay her running costs on any voyage, however bad, but that if they had had two ships of this category, the result would not have been so good. A possible explanation of this fact may be that Quebec and Montreal are closed by ice for four or five months a year, so that the Canadian service can only be operated for seven or eight months in the year. I am bound to say that this argument seems to be invalidated by the fact that ships which cannot be used on their normal runs are put on cruises, which I believe are a paying proposition.
I mention these conflicting views because I hope that every consideration will be given to them before a decision is taken whether or not to build a further ship or ships. I am well aware that the Government are in no way committed to this, and that they will doubtless err on the side of caution, if not of actual delay, in deciding whether or not to subsidise the building of further ships. I mention these views to the House because I would like to hold the balance between the view that the sister ship should immediately be started and the view that the whole scheme should be abandoned. The fact remains that No. 534 will be able to maintain a fortnightly service between England and New York if her speed is put as high or higher than the German or Italian ships, which we have been told will be the case. Of course, this will mean working at fairly high pressure, and consequently a long period for the annual overhaul would be necessary. The ship will probably carry over 3,000 passengers, as opposed to 2,000 carried by the German and Italian ships. Even though the travelling public block to the latest ship, there must be a considerable recovery in the volume of traffic before a fortnightly capacity of 3,000 is required.
The hon. Member for Caerphilly gave some interesting figures showing the decline in these traffics, but he did not tell the whole story. I have more faith than he has in the power of recovery of these traffics, although the position
to-day is worse than he made it out to be. Taking 100 as the figure representing all North Atlantic carryings for all classes in 1913, the comparable figure for 1920 was 55; for 1929, 59; and for 1933, 26. It is true that 1929 was a year of great prosperity in the United States, and that American travellers were responsible for 70 per cent. of the traffic. In 1929 the first class was nearly as full, and the cabin, second and tourist classes were fuller than they were in 1913. The average therefore has been brought down by the falling off in the third class, which in 1929 was only 35 per cent. of the 1913 level, and to-day is 15 per cent. of that level. The explanation, of course, is that emigration, which before the War was the bread and butter of the shipping companies, has practically ceased. I repeat, however, that I have greater faith than the hon. Member in the power of recovery of the North Atlantic traffic, and I have no doubt that this year has already begun to show an improvement.
I would like to direct the attention of the House to the fleets of the Cunard and White Star Companies which will form the assets of the merger company. It is gratifying to know that these fleets will be taken over at their depreciated and not their book values, because after the completion of No. 534, and more especially after the completion of a sister ship, it is difficult to see how those ships will fit into the picture. There is a saying in the shipping world that you cannot have a fleet of hares and tortoises, and though I would not care to suggest that the "Olympic," and more especially the "Mauretania," are tortoises, they are, to say the least, rather elderly hares. Faced with the competition of their own 534, these ships will become redundant except for cruises, and during the period of the annual overhaul of No. 534, which I believe might last as long as two or three months. They therefore seem destined for the scrap heap.
I would therefore like to know why the merger company should be encumbered from the start with so many obsolete ships, for out of the 25 which it is going to take over only two are really up to date, the "Georgic" and the "Britannic." Indeed, of the six existing express liners in the two companies four are pre-war, being 20 years old or more, and three, as is well known, are
German ships which were handed over under the terms of the Peace Treaty. I am sure that hon. Members in all parts of the House have much sympathy with the hon. Member for Dumbarton Burghs (Mr. Kirkwood) and his constituents, who have suffered much from the hardships imposed upon them by the suspension of work upon No. 534, but there is this consolation to be derived from it, that the new French ship "Normandie," the largest ship in the world, will be put into service at least one year before No. 534, and an opportunity will thus be afforded of learning something about the operation of such a ship. I hope that we shall benefit from any mistakes they may make, because nobody knows anything at all to-day about the behaviour of a 70,000-ton ship.
The conclusion to which I come is that a fortnightly express service by a ship carrying 3,000 passengers is amply sufficient for present requirements, but that a return to the 1929 level of traffics might well justify a weekly service. It should be borne in mind that in that year, indeed, until quite recently, there were two express liners a week, one operated by the Cunard and one by the White Star. A return to the 1929 level might well justify the operation of two ships of the size of No. 534. If this course were decided on it would mean the laying down of a second ship, but that construction would take some three years, and the board of the merger company and the Government would therefore have to anticipate this revival if they are to be in a position to take advantage of it when it arrives. I further conclude that owing to the decline in emigration, which looks like being permanent, the designers of these ships must provide a maximum accommodation for the cabin, second and tourist class passengers; and, finally, I conclude that the completion of these new ships, which I consider highly desirable in the long run, must necessarily condemn to the scrap heap a number of the old. Indeed, some of them should have gone there long ago.

4.33 p.m.

Mr. KIRKWOOD: I welcome this new ship not only for the good which it will bring to my own constituency but for what I really believe it means to the shipbuilding and engineering industry of this
country. I believe that as long as this ship, now known as No. 534, lies like a skeleton in my constituency so long will depression last in this country, because as it lies there in Brown's shipyard it seems to me to shout "Failure! Failure!" to the whole of Britain; everybody looks upon it in that light. I wish to make the House and the country right with the Labour party, because some of our opponents might make capital out of what we are doing here to-day. The Labour party are not obstructing the passage of this Bill, and they supported the Financial Resolution. It is perfectly true that they have moved an Amendment, but that is to safeguard our position as Socialists. Nevertheless, in view of questions which have been put to me, and the discussion we have had to-day, it will be better if I put the House in possession of what is really happening here and what we are doing to-day.
We are not asking for £9,500,000 at all. We are not being pledged to £9,500,000. I and the shipbuilding and engineering workers whom I represent here and for whom I speak are only concerned with the building of this ship, and all that is asked for that is £3,000,000, and £1,500,000 for working capital. There is nothing new about that. We voted away £20,000,000 to carry on an industry, and T supported it, as I will support anything which will feed and clothe the people for the time being. I do not believe in making a change in society in the midst of chaos. I believe it is possible for us to carry out our own ideals in the midst of abundance and in order, and I believe this is one of the ways in which that can be done.
It has been said here and elsewhere that there is not the traffic on the North Atlantic to warrant such a tremendous expenditure. One would think that the individuals who are running this business were apprentices. They are the most astute business men not only in this country but in the world, those men who are projecting this merger company; none most astute, none more capable. They have had this idea before them for four years; the actual planning and designing extended over four years before they signed the contract for construction. The length of the vessel is 1,018 feet—300 feet longer than the "Mauretania"; and she
is not 75,000 tons gross weight, but 73,000 tons gross weight.
Our backs are supposed to be against the wall, and it is in such a state of affairs that this great project is brought before the British public. It is quite an easy matter to bring forward a big project when everything is prosperous and all is well in the country, but at the present time it takes what I have asked every Government since I came here 12 years ago to have—courage. Here are a body of men who have courage. They do not agree with me politically—they never did and never will—but they have got the most essential thing to-day either in statesmen or business men, and that is courage, and courage at a time when it was never more essential for it to be demonstrated, because actions speak louder than words. They are making an endeavour to give Britain the necessary fillip. I am not one of the individuals—I never was—who stand up for every other country but their own. I have stood here and pleaded time and time again for extended credits for Russia. If Russia were getting this to-day there would be a different tone in the House from what there is at the moment. And just as I am in favour of Russia getting extended credits, because I believe that would be beneficial to my native land, so I am welcoming this Bill and welcoming the construction of these great ships, which I believe to be inevitable.
It has been said of every great ship that was ever built—I have heard it for 40 years—that it was too big, too ponderous, etc. When we introduced compound twin cylinders 40 years ago it was said that the idea was all nonsense, that it was quite impossible for a ship to contain such an engine: but we have never gone back to the single cylinder. We have gone from large to larger; never gone back from large to small. I do not believe that Britain is down and out. This body of men, after careful consideration and deliberation, cast round Britain to see which was the best firm to undertake the construction of this ship, and they selected one who in my opinion is one of the greatest shipbuilders in the world, Sir Thomas Bell, to do the job. He is the managing director of John Brown and Company. He realised at once that this was a gigantic undertaking and that it devolved upon him to build the best that Britain could produce. He
tapped all the skill and all the technique at his command in Britain, and the result has been that in the deserted hours of night heavy lorries have been lumbering over distant roads bringing materials from every part of England to Clydebank for the construction of this ship.
Giant castings and forgings have come from English foundries and forges. Seven turbo-generators are being built now in Rugby; they are powerful enough to supply light and public service to a large town. Walsall is sending 400 tons of high-pressure tubes. When the Bill goes through to-day, and the word goes forth to go right ahead with the ship, the Potteries will have to male for her 200,000 pieces of crockery. Sheffield will have to make for her 100,000 pieces of cutlery; having already supplied heavy castings and forges up to a weight of 1,000 tons. The cases for the rotary—some of the finest casting that has ever been done—have come from Sheffield, milled and machined in Clydebank to the limits of 1,000½ up and 1,000½ down, in which will be placed hundreds and thousands of blades set by hand by Scottish engineers to the thousandth part of an inch.
Liverpool has an order for £10,000 worth of glass for myriad windows of the ship. The propellers come from a Mill-wall foundry, in London. A Darlington forge supplied the stern frame, one of the greatest engineering feats in castings that have been accomplished in the history of the world, a casting weighing 190 tons. When it was leaving Darlington by rail they had to take it on a cylinder, and it closed up the whole way. It took six hours to convey it 20 miles to the neighbourhood of Middlesbrough, where it was transhipped. Practically all Darlington turned out to see the wonderful feat of transport of 190 tons along that railway. The casting was then transhipped to the Clyde. I have seen those pieces myself in their place. Sir Thomas Bell, and practically everyone who understands engineering and castings are delighted. Sir Thomas Bell points out the wonderful formation of the stern part and the stern frame, the contour and finish of it, and how it fits in as if it had been a forging and not a casting at all. Hundreds of Southampton men have carved out of the earth a dock—the greatest dock in the world—in which the ship may rest—the world's greatest maritime achievement. Among other things
that will be required—and these all come from England—are miles of anchor chains, miles of carpets, miles of curtains and tens of thousands of electric globes and bell-pushes. The ship will require equipment for 15,000 meals every day while at sea. From 9,000 to 10,000 men will be employed right away, all over the country. Within a week, in Clydebank alone, anything from 1,000 to 1,500 men will be started.
The nation has felt the challenge to the shipbuilding and engineering skill of Britain, and to her prestige on the Atlantic, and the challenge could not be ignored. The reply should be as conclusive as possible. The Treasury, once a conservative and isolated institution, has become a pool into which the prosperous pay and from which the distressed draw. In theory that may be all wrong, but in practice, in these changed times, it is the only way to prevent disintegration and decay. It is not sentimentalism that leads me to say that, but the march of men to honest work. That, in my opinion, is the sign of a nation's strength. The march of the same men to honest idleness is a sign of a nation's weakness. After weakness comes decay, and after decay comes disaster. The Government are involving themselves in an expenditure that may seem huge, but this nation, as I have said time and time again from this part of the House of Commons, has spent thousands of millions of pounds upon war. If it came to war again, it would spend thousands of millions of pounds again.
No doubt about it, this is a wonderful nation. Unless we agree to this proposal there will be dislocation, depression and poverty such as followed the War. What have we done since the War? We have set aside £100,000,000 per year for the unemployed and distressed people, and it has meant life to millions of men, women and children. War is death; work is life. This £9,000,000 proposal means life, new life, to the shipbuilding, engineering and heavy industries of Britain. It may mean new life, if once again Great Britain becomes the queen of the Atlantic. Therefore, I am grateful to the Government that they have seen their way to make this proposal, and I hope that the House will receive it as generously as it has been made.

4.53 p.m.

Captain CROOKSHANK: I feel that we all ought to get up and sing "Land of Hope and Glory"—

Mr. KIRKWOOD: Why not?

Captain CROOKSHANK: —after the very patriotic oration of the hon. Member for Dumbarton Burghs (Mr. Kirkwood), and his interesting disquisition upon the various articles which are going from all over the country to build the ship. I am sorry that we could not have a news film as well. There is much that is of very great interest in this Debate. The Labour party have put down what is, apparently, not a rejection of the Bill, but a "taking exception" to it, because the words do not say that they decline to give it a Second Reading. They merely take exception to the Bill. When the Money Resolution was being discussed they were all in favour of it. Perhaps they were shamed by the hon. Member for Gorbals (Mr. Buchanan), and this is the result. Unfortunately, they have put their Amendment in such a form that many other hon. Members who do not care about these proposals are prevented from supporting the Labour party, and thereby a good many hon. Members will no doubt be able to salve their consciences very much more easily than they otherwise would.
It is not only that which is of interest; it is of interest to see who is and who is not taking part in this Debate. I should have thought that the Minister most interested and most concerned—certainly the one who has most knowledge of these matters—would have been the President of the Board of Trade, but his name is not even on the back of the Bill. I do not question why he is not here to-day. No doubt he has some other appointment. It is very strange that he should not be supporting the Measure by putting his name on the back of it. The Financial Secretary to the Treasury said just now in his speech that one of the prime movers in this matter has been the right hon. Gentleman the Member for Hillhead (Sir R. Horne), but he has not been present either during any of these Debates.
I saw in the Press this morning that at a meeting of a body of which I have never previously heard, and which is called the Parliamentary Shipping Committee, only yesterday there was a dis-
cussion whether they were to receive a subsidy, apparently for tramp shipping. I do not know if any Members of that committee are to favour us with their views to-day. On the Money Resolution Debates no one spoke who had any specific knowledge of shipping problems, or who sat for any constituency concerned more directly with shipping than, for example, my own. The House has had no guidance in this matter. I do not like to comment on my fellow Members, but it is a pity, in a case like this, that we should have had no guidance from hon. Members who have expert knowledge which they ought to put at our disposal.
There are two different problems in regard to this Bill. There is a financial question, and there is the whole question of policy. The policy question is as to whether there should be such big ships. Of course, the hon. Member for Dumbarton Burghs naturally wants the biggest ship, because it employs the most people. If you could have a ship of a million tons it would employ practically the whole population of his country—not a bad idea. From the point of view of practical politics, the Bill resolves itself into this House trying to answer two questions. First, is this big ship policy the right one? Having settled that question—upon which I submit we ought to have far more views from hon. Members who are capable of giving them to us—and granted that this is a useful policy, there is the question as to whether this idea of providing £9,500,000 of money loaned by the taxpayers is the right financial policy to adopt.
Those are two entirely separate questions, and they are both linked in this Bill. On the point in regard to big ships, the Financial Secretary had nothing to say except that this matter had been going on for a long time and that no one had protested until the Government came down to the House with a Money Resolution. That may well be the case. I hope that it is not to be assumed that Members of Parliament have to protest about what they see in the Press or perhaps what they see in question and answer in this House. Surely it is admitted that the right time for this House to take cognisance of matters of this kind is
when the Government take upon themselves the introduction of a Measure.
Many hon. Members are very fond of grandmotherly legislation. A great number of us are nosey Parkers who put our noses into all sorts of things that are no concern of ours. I do not think that we ought to be blamed for not doing it. It is time enough when the Government bring down Measures, for any observation or criticism that has to be made to be made then. The Financial Secretary to the Treasury as much as said that those of us who are not sure about this ought to have said something about it long ago. He surely forgot that the text of the agreement which has been reached has only been published and printed for a very short time. When we come to the question of the finance of the Bill and whether this is a right policy to adopt, it is very relevant to consider the agreement in the form in which we have it.
I hope I am an orthodox Conservative, and I must say that one of the things which have distressed me most about this episode so far has been that what we Conservatives always said would happen, if the State started interfering with industry, has happened. During the Debate on the Money Resolution not much advice was forthcoming from those who are expert in shipping with regard to this policy, but there was an indecent rush on the part of Members for different shipyard constituencies to put in claims that the second ship should be started forthwith, and more particularly in their own area. We always said that that would happen, and that is one of the incidental reasons why I deprecate the Government coming into this business. They are bound to be subjected to all kinds of pressure, and, although the Chancellor of the Exchequer said the other day it was no use setting out to skin the bear before it had been shot, I am not certain that there is not going to be a good deal of repetition of such claims to-day.
When the hon. Member for Dumbarton Burghs tells us about the height of unemployment in his constituency, I would remind the House that there are many other places where it is very bad also. The hon. Member, unfortunately, has not a monopoly of that. But he has had what many people have
not had, for during the last 12 months no less than £3,000,000 worth of Admiralty orders have gone to the Clyde. That must make some slight difference to the situation as compared with what it was 12 months ago, and, therefore, to that extent it is not so necessary to press this proposal from the point of view of Clyde unemployment. I think that that must be the case on the figures. Would not the same sort of amount of employment—I do not know; I just put the question—be or have been available supposing it were agreed, which apparently it is not yet, that a mammoth vessel of this size is not particularly good policy, but that it would be much better to build two smaller ones, about which there is far more agreement in technical circles, as far as I can make out, than about this very large vessel? If that were so, it would dispose, within certain limits, of the first question.
Therefore, I would ask the Government, before the Debate ends, if it should happen that no private Member proves the case, to state definitely what their expert advice is on the question of big ships. What is the advice that they get? Surely the Board of Trade must know something about it; surely, at any rate, they could get some sort of information, though it would not be exactly the same kind of advice, from the Admiralty, on a problem of this kind? When the Financial Secretary says that we are only rehashing the Debates of 23 and 24 years ago, and that the hon. Member for Gorbals and I both had our predecessors then, I feel rather sorry, because I thought that my hon. Friend, the hon. Member for Gorbals, and myself were unique. I regret to think that there were people like us 23 or 24 years ago. But, surely, there is one essential difference, and that is that, when those Cunarders were laid down with the assistance of the State, it was surely common knowledge that they had a cruiser value in the military sense. Indeed, they were used as such, or certainly some of them were, during the War, and it was always at the back of the mind of the House at that time that they would be of some use in that way. We have to take our minds back to 23 years ago, when the German menace was coming along. To-day there is nothing of that kind at all, because nobody in their wildest moments
would imagine that a 72,000-ton ship could be of any military use at all, and, therefore, we are dealing with a rather different set of circumstances from those of the previous occasion. I would ask, and I think one is entitled to ask, for some expert guidance on the technical side with regard to the big ship policy, about which nothing, so far, has been said in these Debates.
As regards the other matter, I do not want to repeat what I said before, and so I leave it that I do not think it is wise, at this moment of time, to hypothecate £9,500,000 of the taxpayers' money for the purpose of this policy when we are still going through an economic crisis. Certainly, we have had nothing in the way of budgetary assistance to make us think otherwise, whatever may be coming in the future. We are still very strictly rationed in our public expenditure, and no one can hold out any hope that, if this is made as a loan, the amount will ever be repaid. Further, we are up against this difficulty, that at the present time the chief competitors in the big-ship policy, and the Americans more especially, are considering—I understand that Mr. Roosevelt has announced that he is going to reconsider—the whole question of subsidising shipping and also, as he is doing now, air transport and the like. If, at the very moment when the people who are to-day subsidising their shipping, as I think all countries are doing in one way or another—France, Italy, Germany and the States—if at the very moment when one of them is just about to consider knocking off some of the subsidy because they think it is an uneconomic proposition to carry out that policy, we in this country go in for subsidising these big ships, it will certainly act as a deterrent to their taking off any of their subsidies, and will probably bring them into a further subsidy war and lead to disadvantages on all sides far greater than the advantages which are envisaged by the Government.
I end with a reiteration of one point that was made by the hon. Member for Caerphilly (Mr. Morgan Jones), because it struck me as a point on which the Financial Secretary might perhaps give us information. That was his statement that the equity in the White Star Line does belong to an American concern. If that is true, and if it is of any value, I think the Government ought to tell us
whether they have any intention of dealing with it or not, and, if so, on what lines. It may be that the hon. Member for Caerphilly has got hold of a mare's nest, or it may not, but, if there is anything in it, I hope we shall have a very clear explanation of what the situation is with regard to any possible United States interests in the merger company. We cannot say that the Government have been rushed into this policy, because it has been in the air, as the Financial Secretary said, for a long time; but I, for one, regret that they have not given far more adequate reasons to the House for embarking upon it at the present time, and I think it is a pity, to put it no higher, that, when we do not yet see our way to getting the cuts restored and taxation reduced, we should now launch out on a vast amount of public expenditure on what must be a speculative venture—because, if it were not speculative, the people concerned would have no difficulty in getting all the money they want in the City of London.

5.10 p.m.

Sir CHARLES BARRIE: I cannot claim to be able entirely to fill the bill required by the hon. and gallant Member for Gainsborough (Captain Crookshank), but possibly I can add one or two words to the Debate which may be of interest to the House. The hon. and gallant Member has asked whether the Government are quite sure that the big-ship policy is a proper one. I think the House will agree with me when I say that the Cunard Company, who have had great experience of large ships on the Atlantic, and who years ago built large ships like the "Mauretania" and the "Aquitania," were at that time charged with the very same doubt with which the Government are being charged to-day in connection with the promotion of the building of these two vessels. The Cunard Company were charged at that time with building vessels which were too large, and the same thing is happening again. But, whatever the layman may think, the fact remains that for the Atlantic and for these long-voyage trades the ships that get the cream of the traffic are undoubtedly the largest vessels. In the South American trade it is perfectly well known that all that the Latin population of that part of the world care about is getting on board the largest vessel they can find and getting to the other side of
the Atlantic, or wherever they may be going, as quickly as possible.
The hon. and gallant Member for Gainsborough said that this new vessel, and another vessel built on the same lines, would have no value as far as war-like purposes were concerned, and that no one could imagine that any ships of this size would be required in time of war, as they would be too large. I am not complaining of what he said, but only endeavouring to answer it. The answer, surely, is that during the War the ships that were of the most use to the Admiralty on the long-voyage trades in bringing troops, especially from America, were undoubtedly the large Cunard and White Star vessels. Indeed, they were not confined to the Atlantic, for it was they that took the larger part of the troops to the Mediterranean and Gallipoli, and, indeed, the Mauretania acted as the largest hospital ship. Therefore, from that point of view, it cannot but be said that the large ship is undoubtedly an asset in time of war, as, indeed, in time of peace. I certainly hope that there may be no more war, and that these ships may not be required for that particular purpose, but war was a long way off when the "Mauretania" and "Lusitania" were built, and they proved to be very useful factors in the Great War.
So far as this Bill is concerned, I personally, as a shipowner, am in general agreement with it in so far as it promotes and is for the benefit of the shipping trade in general. I may not be allowed by the Rules of Debate to go far outside the Bill, but in the building of this ship the national prestige is undoubtedly at stake, and anything that we can possibly do to retain that national prestige ought to be done. Whether it is done wholly by private enterprise, or by private enterprise supported by the State, I hold that it ought to be done, and that the Government are perfectly right to come in at this present moment and promote the building of the vessel. Certainly, it is said that if it were a good venture the shipowners would do it themselves. The shipowners did start it themselves, but the state of trade in the Atlantic, and, indeed, in the world, was such that they thought it advisable for their own good reasons to stop the building of the vessel, and no doubt to-day, if it were not for the fact that employment
is so bad in the shipbuilding centres, the chances are that they might quite possibly defer it for perhaps another year, until things got better. As things are, I think the Government, in view of the desperate condition of our shipbuilding centres, were quite entitled to come in and say to the Cunard Company, "If you will go on with this vessel now, we will come to your aid and give you some assistance."
The building of this vessel will cost some £4,500,000, a very large sum no doubt, and I should like to know from the Financial Secretary to the Treasury how the House is to be informed before the second vessel is to be proceeded with. The Government may be, and I think they are, wise in insisting so far that the second ship is not to be proceeded with. The experience that they will get from the present vessel will undoubtedly be of great value to them, and it might be that they might find that in some respects she was not quite satisfactory, and, therefore, they might change their minds and build something entirely different. Therefore, I am glad that there is evidently no commitment other than the authority that they have taken under the finance part of the Bill to proceed with the second vessel.
I take it also that the action of the Government in taking this interest in shipbuilding is a foretaste that they are going to take much more interest in shipping and the general shipbuilding of the country than they have so far taken. The shipping trade is in a desperate position. Not very long ago we owned at least 50 per cent. of the world's shipping. Now the total is something like 27 per cent. It ought, therefore, to be the business of the Government—and I hope it will be eventually—to come to the general assistance of shipbuilding in order that the industry in general may be assisted. £4,000,000 would build 100 tramps and would spread much more employment over the length and breadth of the land than if spent on one vessel. I do not say, "Do not proceed with the second Cunarder when the time comes." All I say is that I take the Bill as being the forerunner of further assistance to the shipping industry, not for the sake of the industry itself, but in the national interest. I carefully noted the words of the Financial Secretary that Britain ought to hold her
rightful place on the Atlantic and that this House should show its general interest in the renewal of British industry. Undoubtedly the step that the Government have taken to promote the building and finishing of this ship is in the interest of British industry, and I hope it is the precursor of similar measures which may be introduced.

5.18 p.m.

Mr. LOGAN: The last speaker has emphasised the point that he was able to approach the subject in a paternal way, because he knew that an extension of the benefit was likely to come along; and we find from our own Front Bench an Amendment brought forward by way of honest criticism of the great business merger, one of the finest business mergers that I have ever known brought forward from the point of view of high finance, and one which certainly calls for close examination by business men. I thought it was a well reasoned statement that the hon. Member for Caerphilly (Mr. M. Jones) placed before the House when he dealt with the great financial assets of these companies and also the responsibility which must naturally follow in regard to the question of the merger. But business men, whether representing the Treasury or the Cunard or Oceanic companies, at least know something of business. They thought the tripartite arrangement was a matter of arrangement from a finance point of view, and I cannot believe that men associated with great shipping interests and those associated with the Treasury have not a knowledge of high finance.
I have a greater knowledge of poverty than of high finance, and I am at a loss to understand why men are not at work. Although we may have textbooks laying down certain lines which must be followed in good times, when it is a matter of emergency and there is a call for action, many theoretical principles have to disappear. While it may be wise to find out the dangers from the financial aspect, I am in this unfortunate position, that there are not financiers in my particular district and the people there want bread and butter. I understand that, as far as this merger is concerned, 1,500 men will get employment. Suppose of that 1,500 men at least 1,000 are artisans and mechanics who have been continually unemployed, who have a
knowledge of the handling of tools and will be able to get back to the lathe and to the understanding of the mechanism of the shop, we shall be doing a great useful national work.
I am told that this job is to last a year or two years. Suppose we take it that for the artisans it is a year. When I realise how many people are hanging round the docks not able to get work, I wonder whether something of this kind, although £9,000,000 may be at stake, is not beneficial to the nation. When I realise that a thousand men at £3 a week will mean a large saving in the rates, at least that is something that is going to benefit Glasgow. I regret that it is not going to Liverpool.
I am at one with my friends when it comes to a question of Merseyside. The building of the dock at Southampton took the great liners down there and was a great loss to us. I also realise that men will be wanted to man the boat, and there are many men who will be able to take a sea-going job again. I am anxious that proper precautions, as set out by my hon. Friend, may be taken into consideration, but I am more anxious still that men in the mercantile marine, engineers, and others in ancillary trades shall resume their occupations. In my younger days I watched the progress of the "Alaska," the greyhound of the Atlantic. The Merseyside, which had been absolutely derelict, felt that a new era was coming. I feel that an impetus to shipping can be given by the building of a 73,000-ton liner. I am convinced that the best mechanical skill and brains will be brought to bear upon the construction of 534. I realise that, whether we are competing in the workshop or with the nations of the world, that nation can only be great and prosperous which is best able to take care of its own people. If the question of the mercantile marine is not attended to, if our shipping goes off the sea, if owing to foreign subsidies we are not able to compete in the markets of the world, our decay will soon be at hand. I believe that only on the sea are our men to be made fit and proper. It is the history of the sea that has stood to our credit. Everything that concerns us is a question of the sea. It is because I feel a new impetus is to be given to shipping, because I can see a resurrection
and a new life, that I have great pleasure in supporting the Bill.

5.27 p.m.

Miss WARD: The Debate has been mainly concerned with the wisdom of the Government proposals from a financial point of view, and on these I am not qualified to offer any opinion. My anxieties and those of my colleagues, the Northern group, for whom I speak, lie in another direction, and I should be very grateful if we could have a specific reply to the two points that I am going to raise. First, in view of the magnitude of the Government's financial obligations, if it is finally decided that there shall be a sister ship, or two ships, built, are the Government reserving to themselves the right to have some say in the placing of the contracts. I have no intention of being the leader in the skinning of the bear, but I should like to know whether the Government are reserving to themselves such right. I appreciate that it will rest with the Government to say whether the additional £5,000,000 provided for in the financial Resolution will be paid to the Cunard Company or not, but am I right in saying that the interpretation of the words contained in the Financial Memorandum, "within the discretion of the Government," carries with it the implication that the money will be paid on certain specified conditions, one stipulation of which might well be that the contract should be placed, for a variety of reasons, on one particular river? I think it is not unreasonable to suggest, in view of the very real benefits which will accrue in a variety of directions as the result of the placing of this contract, that those benefits should not be confined to one area.
It has been very often stated, I think quite rightly, that Admiralty contracts are always allocated on the lowest tender. I think it is fairly obvious that, when you have a full yard, with your overhead charges considerably reduced, a firm in such a happy position must necessarily be able to lower any tender that it may make in any specific contract. For instance, a firm like John Brown & Company, having obtained such a vast amount of assistance from the taxpayer, will be able, as one of the firms contracting for Admiralty work, to make at any rate a very good showing when it tenders for the new cruisers, an invi-
tation to tender for which, I understand, has recently been sent to various firms. For that reason, as well as for many others, I should very much like to know whether the Government are taking into consideration the position of all the firms all over the country who have to tender in competition with the firm which is now building the No. 534 hull?
The second point I would like to put is whether it is really the intention of the Government to wait until No. 534 has been launched and completed and put into operation for a sufficiently long period to find out whether she is really a paying proposition or not. I would, perhaps, if I may, remind hon. Members that expert opinion rather holds the view that had the building of the No. 534 not been held up, France would never have undertaken the building of the "Normandie." I feel very strongly, whether it is wise or whether it is not, if we have decided to go out to capture the blue riband of the Atlantic and to regain our lost prestige, that we should do so immediately, courageously and in no halfhearted manner.
I should like to offer my congratulations to the Clyde, but I think that it is perhaps necessary on behalf of the Tyne to rectify one or two misapprehensions on the part of some of my hon. Friends. As the Chancellor of the Exchequer very neatly put it when he laid the original Financial Resolution before the House, there has been a great deal of discussion as to which may be the fortunate district to obtain the building of the sister ship or sister ships, and many of my hon. Friends have asked me whether it is possible for the Tyne to undertake the building of such a large ship if we were fortunate enough to obtain the contract. I think, in all fairness to the Tyne, that I might say that we have two yards which are in a position to undertake the work.
I am not going to say anything more with regard to the Tyne, except that we have heard a great deal of discussion this afternoon as to the economic possibilities with regard to the running of No. 534, and perhaps it might be of interest to know that the most economic ship of the whole of the Cunard fleet is the "Mauretania," which was built on the Tyne in my division. I appreciate, in the same way as I think do all hon.
Members in the House, the tremendous hope which must have been given to the Clyde by the announcement of the Government. Coming as I do from a very depressed shipbuilding area, I am very glad indeed to think that, at any rate, one part of the country which is dependent entirely upon the shipbuilding industry has received this great fillip to its basic industry. But I would in all seriousness, and with all the power at my command, say to the Government that if we are in the future to preserve the peace and sanity of Tyneside, we expect in some form or other—that, I am naturally only too glad to leave to the discretion of the Government—that the Government should not be long before they bring forward a constructive policy dealing with the deplorable condition of shipping and shipbuilding.

5.32 p.m.

Mr. McCORQUODALE: I am, perhaps, in the fortunate position in that my constituency is in the West Riding of Yorkshire and far away from any port, and consequently I have no lively hope or expectation of the Government for the future in this matter. I do not wish to delay the House with a discussion of the general principle of this Bill, but merely to emphasise one or two points which I do not think have been brought out in the Debate yet. The Government are insisting on a merger between the White Star and the Cunard. One of the reasons given for the merger is that it is going to put a greater number of people into work on the Clyde and elsewhere in the building of this new ship, and that we may all applaud. But mergers are uncomfortable things. I, personally, dislike them, and I believe that the Lord President of the Council, from certain speeches he has made, dislikes them also, for they result inevitably in the dismissal of a great number of clerks and other loyal members of the staffs of the companies before they are merged. If we are in this House taking a step which results in the wholesale dismissal of clerks and other loyal members of the staffs of the Cunard Company or of the White Star Company, it will be absolutely deplorable.
We have a grave responsibility in this connection, and I would therefore like to make a suggestion that the Treasury should insist—and I think that we have a right and a duty to see that the Treasury
insist—that these two companies and the merger company when it is formed should make every effort to see that every man possible should be retained, and that no more dismissals should take place than are absolutely inevitable. I would go further and say that they should pursue this policy even as far as a small diminution in their profits. In the course of my business I come into contact with a great number of the staffs of the White Star Company and with a certain number of the Cunard Company, and I would like to testify that, in my opinion, there is no finer, more loyal or more able set of men than the staff's of these two companies. Therefore, I would like to urge upon the Treasury that they should bear that fact in mind. I am convinced, from my knowledge of the managers of these two companies who will naturally form the personnel of the new merger company, that they have no wish to see the dismissal or the discharge of their staffs.
I should like to make a further small point which rather interests me personally. I have for some time been asking questions in this House as to the desirability of removing the large charge made to Americans for visas to visit this country. I have always received from the Foreign Office an uncompromising "No." Now the Treasury are going into a form of financial partnership with this new company, and are therefore going to benefit or not as this company trades profitably or not. I know that not only the Travel Association, but also the experts in this company are in agreement that the high visa charge of 10 dollars to each American citizen visiting this country is an actual detriment preventing American tourists coming to this country. The Continent is far wiser in this respect and welcomes eagerly, with small or even no visa fee, American tourists. If I have the opportunity to raise this question again with the Foreign Office, I shall hope, and indeed I shall expect, the active support of the Treasury, as they will be financially interested in this question. I hope that I shall not be disappointed.
There is no doubt, as the hon. Member for South East St. Pancras (Sir A. Beit) said, that the success or otherwise of this venture depends upon the return of prosperity to the United States and to this country, and more especially to the United States. Given that prosperity which we all so desire, I see no reason
why the new merger company should not, with this mammoth vessel, carry the British flag not only with honour but also with profit on the North Atlantic services.

5.41 p.m.

Sir GEORGE GILLETT: I should like very cordially to support the hon. Member for Sowerby (Mr. McCorquodale) in what he said with regard to the question of the charge made for visas to those who visit this country. Many hon. Members of the House may not be aware, or they may have forgotten, that the Secretary to the Overseas Trade Department acts as chairman of the executive committee of the Travel Association, and this matter came specially under my attention when I occupied that position. I hope that this Measure may result in the abolition altogether of the charges which have been made. I entirely sympathise with the hon. Member on the first point which he raised about the hardship inflicted upon the staffs of organisations when an amalgamation takes place, and I very much hope that he will press that matter forward if he becomes a Member of the Committee and is present at the Committee stage of the Bill. At the same time, I congratulate the Government upon having insisted that the amalgamation should take place. I cannot help thinking that, in many of the industries to-day—we know the view held in connection with the cotton trade and the steel industry—unless some outside compulsion is brought about, it is impossible to bring together the firms, which is felt to be absolutely essential for their prosperity. I conclude that the delay which has stopped the continued building of this vessel has been largely due to insisting on amalgamation taking place.
I congratulate the hon. Member for Dumbarton Burghs (Mr. Kirkwood) on his speech, and wish to say how very much I enjoyed it. I know nothing whatever about engineering. It always seems to be so dull and uninteresting. The only time I am interested in the romance of engineering is when the hon. Member speaks. No other hon. Member in this House who represents engineering inspires me with enthusiasm so much as the hon. Member for Dumbarton Burghs, who always makes such a
romance of the industry by his devotion to it. At the same time, I do not agree with the hon. Member if he thinks that the Amendment which have been moved from the Front Opposition Bench is not liable to delay the Bill. He himself stated that it was not intended to delay the Bill, but it is obvious that it could have no other result.
The suggestion is that instead of the Bill being now read a Second time we should pass the Amendment. If we did that the effect would be that the Bill would be dead, the money would not be advanced, and the men who are to benefit would not be paid. Therefore, we are confronted with the extraordinary fact that hon. Members opposite intend to support an Amendment which would virtually mean that thousands of men would be prevented from getting employment. In support of the Amendment they have brought forward side issues which have been fully explained before. We know the views of hon. Members opposite regarding the organisation of industry, but to suggest that those things can be brought into operation at this time is absurd, when what is wanted is the money to pay the men who are to be found work.
I listened to the hon. Member who moved the Amendment. He went into a long disquisition about the financial question and whether it was sound or not. One might almost have thought that the hon. Member was a banker, but I would not wish to insult the bankers by thinking that he was one. Speaking as a banker, I should like to say that he was wasting his time in discussing the financial question in the way that he did. It was needless to go into the financial question in that way. If it was a financially sound transaction the money would be advanced in the ordinary way on the money market, and there would have been no need to come to the Government for the advance that is to be made. That proves conclusively that there is something about the scheme which in an ordinary business way has an air of uncertainty and doubt. Therefore, the way to provide the money is by the Government coming forward and advancing it. That has been the whole basis of any scheme under the Trade Facilities Act, where guarantees have been given because there was doubt in the financial
world, and the financial machine was not functioning. Here, once again, we are in exactly the same position, and the financial machine is not functioning.
The question is, is the vessel to be built or not? If it is to be built, it must be built by money virtually provided or guaranteed by the State. That, I take it, is the simple question which we have before us. I am very glad that the Government have been able to compel these two companies to amalgamate before they were willing to find their contribution. It seems to me that the hon. Member for Dumbarton Burghs answered the other question that was raised. The hon. Member who moved the Amendment asked how was the Government to be assured that the control and management of the new combine would be efficient. The body of men who have been so eulogised by the hon. Member for Dumbarton Burghs are responsible for controlling the combine, and what he said seemed to me to prove conclusively that the control is in the hands of men who are best qualified to direct a great concern of this kind. I hope that the hon. Member for Dumbarton Burghs will assure his hon. Friend who moved the Amendment that he need have no concern on that score, because he is fully qualified to testify that the men who are going to direct the combine are admirably qualified to do so.
That being so, we come back to the main point. We need not go into the full financial position. We know exactly where we stand. The only question that we have to decide is, are we to pass this Bill and provide the money in order that thousands of unemployed men may have work? That is the question before us. The Amendment could only have the effect of delaying the provision of work. I am interested to see hon. Members opposite taking this course. We in London go through stormy times at our political meetings, and hon. Members have given me a very good excuse at the meeting which I have to attend this evening for saying that we have had an extraordinary sight presented to us of money being provided by the Government with the object of finding work for the unemployed, and Members of the Labour party going into the Lobby against it.

5.56 p.m.

Mr. ALBERY: I, in common with everyone in the House, welcome the objects of
the Bill. We all want to regain supremacy on the Atlantic, we all wish to assist employment, and we are only too glad to assist the Cunard Company or any merger company in bringing that about. The chief objection which I have had to the Measure up to the present is not because of what it seeks to do, but the manner in which it proposes to do it. When I came here to-day I intended to listen to what the Government spokesmen would have to say on the general side of the problem, that is, the information which I expected he would give to the House regarding the prospect of this scheme being successful, and then I proposed to make a few remarks about the financial aspect. Unfortunately, the information we looked for has not been forthcoming. No one from the Government Bench has told us anything whatever as to their information, or the steps they have taken, or what reason they have for feeling convinced that the wisest thing we could do, even with the great objects in view, is to continue the building of this large vessel.
Reference has been made to the "Lusitania" and the "Mauretania." That appears to me to be quite a different matter. When the loan was made for the building of those two vessels—and I believe in addition an annual subsidy was granted—they were built under Admiralty supervision, and there were special conditions that they should be so constructed as to be able to be fitted with guns for Admiralty service afterwards, if necessary. There is a great difference in the building of the "Lusitania" and the "Mauretania" and the proposal now before the House. The "Mauretania" and "Lusitania" were built as a result of the skill, foresight and ability of designers in this country, and we were going to give a lead to the world. We built two vessels such as had never been built before. They took a definite lead on the Atlantic and maintained it for many years. We are proposing to do something to-day quite different. There are four or five large vessels already on the Atlantic, and commercially it is admitted that, owing mainly to the prevailing conditions, they are not financial successes. The ship which we are proposing to complete was laid down a considerable time ago, and there is no reliable reason for assuming that when that ship is completed, or when any other similar ship is completed, it will give us anything like the lead in the
Atlantic trade which we obtained by building the "Mauretania" and the "Lusitania."
I have never professed to be in any way an expert in shipping, and I would not have said as much as I have said if the information that we want had been given to us. We ought to have more information. I should like to ask the Government whether it has been made a condition of the granting of the subsidy that the merger company shall proceed with the finishing of the large ship No. 534, or have the company been given the option of building two or three smaller ships, but with not less speed? Has it been made a definite condition of the granting of financial assistance that they must proceed with the ship now on the stocks, whether they believe that to be the best thing to do commercially or not? I hope that the Minister who replies will give us a definite answer on that point.
I want to make a few remarks regarding the peculiar circumstances which arise in the Financial Resolution on which the Bill is based. Some hon. Members have referred to them as if they were customary or similar to those which have been put forward on previous occasions. They do not appear to me to be at all similar. When the Government decided to give assistance to the companies engaged in the North Atlantic trade, I expected that they would have an adequate and substantial guaranteed loan against the securities which were available. Under the present financial proposals they are doing something quite different. The Financial Secretary to the Treasury cannot have it both ways. He has assured the House that we are finding money on security, and he has also assured us that we are shareholders in this undertaking. On examining the financial proposals, one finds that we are giving a very considerable subsidy. We are lending money at one-half per cent. under the Bank Rate, and we are lending other money at three per cent., or a possible five per cent. That represents a very handsome subsidy.
There is another point in the agreement which astonishes me still more. There is Income Stock A, and I find at the end of the agreement that Income Stock A ranks only in the event of liquidation, which I hope will not happen, pari passu with the ordinary stock of
the merger company. If that is the case, it would have been plainer and more easy to understand if the rest of the money had been put up not as Income Stock A but, frankly, as the Government taking so many shares in the merger company. I do not advocate the Government being shareholders in a commercial enterprise of this kind, but if it is to be done, I would rather it was done in that way than in the way it has been done. If we are to have a share in industry, and if we are to be definitely interested in it, we are entitled, I will not say to some measure of control but to some measure of what one might call intimate information. That would not be entirely a novelty. We have at present shares in the Anglo-Persian Oil Company and on the board of that company there are directors representing the Treasury. It seems to me, taking the matter broadly, that our position in regard to this merger is far more similar to our position in the Anglo-Persian Oil Company than it is to the undertakings in which the Treasury has merely used its credit facilities for the borrowing of cheap money by commercial concerns.
I hope that before the Debate finishes we shall get from the Government, or, if not from them, from some hon. Member or hon. Members, information as to what the prospects are likely to be in building these big vessels. The hon. Member for Southampton, (Sir C. Barrie) made an interesting speech, but he did not give us any real lead. I hope that the Government will be willing to consider Amendments in Committee, and are not going to inform us that on account of agreements which have been Made, or which are proposed to be made, it is quite impossible for them to consider any Amendment.

6.1 p.m.

Mr. DAVID MASON: I should like to offer a few observations on the finance of the Bill. Clause I (3) says:
All sums received by way of interest on advances made under Sub-section (1) of this Section shall be paid into the Exchequer, and all sums received in repayment of such advances shall be applied, in such manner as the Treasury may direct, to the redemption of debt.
In the Second Schedule to the Agreement it is provided that:
The security shall be constituted and secured by an issue at par of debenture stock of Cunard, Limited.
Later on, the Agreement provides:
The debenture stock shall mature for payment on the 31st December, 1975, with an option to Cunard to redeem the same in whole or in part in sums of not less than £10,000, or multiples thereof, at any time on giving one month's previous notice of its intention so to do.
In regard, therefore, to repayment there appears to be an option to the Cunard Company, but there is no obligation on the part of the company to repay. Therefore, I would like to ask whether it is not possible to have some form of sinking fund created which would be some guarantee for the taxpayer. We all in this House represent the taxpayer, although some hon. Members seem to bear their own constituencies particularly in mind. But is it not possible by an Amendment in Committee, to give, in addition to this option to the Cunard Company to pay off when they feel inclined, some obligation on their part to create a sinking fund whereby the taxpayer who is to advance this money might have a guarantee of the repayment of his advances? The hon. Member for Caerphilly (Mr. M. Jones), in proposing the Amendment, said that he was prepared to welcome a resumption of work on the vessel No. 534, but he devoted the greater part of his speech to arguing, apparently, that we should not go forward with the proposal. He pointed out how in these depressed times it was impossible for the Cunard or any other company to issue debenture stock. The revenue returns have been so dreadful that it is impossible to raise the money. Therefore, if we want to do this as a fair venture, there is only one possible way of raising such an enormous sum of money, and that is by the State stepping in.
There is also in the Bill provision for the creation of the board. There is one principle to which we all subscribe, and that is that where public money is involved there should be some form of public control. I think that in a company such as this there should be a representative of the Treasury on the board. If we are going to advance £4,500,000, possibly £9,500,000, we are entitled to have a representative on the board of the company. It could be easily provided for. We are advancing public money,
surely then there should be some measure of public control. I offer these two suggestions, which I hope are not of a useless character, for the consideration of the Government.

6.8 p.m.

Mr. BOOTHBY: I am rather inclined to agree with the last observation of the hon. Member for East Edinburgh (Mr. D. Mason). It may be desirable to appoint a representative of the Government to the board of this company if only that he may be in a position to ascertain for himself at first hand, on behalf of the taxpayer, exactly how the company is doing from a financial and commercial point of view, so that the Government should have immediate and first-hand information. I do not oppose the Bill, although I regard it with some apprehension, which has not been allayed by one or two of the speeches made this afternoon. We shall have to see how it works out. We are not for the first time in this Parliament giving assistance to a very speculative enterprise at the expense of the taxpayers of the country, and I am much alarmed about one point raised by the hon. Member for South East St. Pancras (Sir A. Beit), to which I hope the Financial Secretary will pay some attention, that is, the number of obsolete ships which have been transferred to the merger company. The only two absolutely modern ships which are paying their way are the "Georgic" and the "Britannic," and I am not convinced that under existing conditions, with competition from Italy, France, Germany and the United States, ships like the "Majestic" and the "Berengaria," which are capacious but by no means fast, are every likely to pay their way again. A great many of these ships which are being transferred to the new merger company will be like a millstone around their necks under modern conditions in the North Atlantic. I should like to have the opinion of the Financial Secretary on that point.
Then there is the question of speed. I believe that ultimately the success or failure of this venture will be decided by the speed. The hon. Member for Southampton (Sir C. Barrie) pointed out that experience in the South Atlantic trade showed that people nowadays would do almost anything to get taken quickly from one place to another, and
I should like the Financial Secretary to tell us what the speed of this new vessel is likely to be. I agree with the hon. Member for Gravesend (Mr. Albery) that we have not had much information from the Government as to whether they think this ship is going to pay its way; and why. That is the real point upon which the House is most anxious to have an answer. We shall have to make up our minds, sooner or later, upon what principles we are going to conduct the financial relationships between the State and industry.
We have entered now upon an absolutely new economic era. Many of us regret the virtual disappearance of free markets, and the consequent necessity of State control of production and prices. In existing conditions the State is bound to be involved in the conduct of finance and industry. We have felt our way step by step, according to some sort of rough principles and some sort of plan, but this House, I think, ought to demand with increasing emphasis from the Government in the course of the next few months what economic principles govern their action in cases of this kind, or, for example, in the case of the hydrogenation of oil from coal, which we are shortly to consider. Why do the Government choose these particular industries for financial assistance? Why not tramps? The Government could build 100 tramp steamers for this one Cunarder. I am not saying that they are wrong in choosing the Cunarder as against the tramps; but why? That is what we want to know. What are the principles governing their actions in this new economic policy?
The hon. Member for Southampton, in a speech which I think was alarming, made a confident plea for the subsidisation of the entire shipping industry of the country. If he is going to continue on that line, some of us will have a lot to say regarding the fishing industry. We shall want a good subsidy. And where is the process going to stop? Who decides what industries are to receive this financial assistance? Is it the Board of Trade? If so, by whom are they advised? There was a body set up by the Prime Minister called the Economic Advisory Committee. Do they ever meet? Perhaps the Financial Secretary can tell us whether they meet, and, if so,
what happens? Has it been called upon to advise in matters of this kind? This is a question upon which its advice might be valuable. We are now proceeding down a very difficult and dangerous path, so far as economics are concerned, in a very haphazard, almost careless way. I feel that the Government should, if not in this Debate, at any rate at an early date, give us the general principles which are guiding them at the present time in framing this particular aspect of their economic policy.

6.13 p.m.

Lieut.-Colonel Sir WILLIAM ALLEN: In this Debate I have heard of the Clyde, the Mersey and the Tyne. My home is in Belfast. I expect that hon. Members are all thought-readers, and know exactly what I am going to say. In the first place, I should like to congratulate the Government on introducing this Measure and also the hon. Member for Dumbarton Burghs (Mr. Kirkwood) on having secured this for his constituency. We should all like a little of the good things that are going. The merger company has been formed by the combination of the White Star Line and the Cunard Line. Practically all the big ships of the White Star Line have been built in Belfast. I think, therefore, we have a claim that when the sister ship is to be built, Belfast should produce it. I see no reason why Belfast should not have the first claim. At least that is my opinion, and I believe it is the opinion of the Belfast people.
My constituency would have only an indirect interest in seeing the ship built at Belfast, for I happen to represent one of the six counties that does not touch the sea. But we consider that Belfast is the hub of the six counties area in Northern Ireland, and when Belfast is busy it means grist to the mill of all the counties in Northern Ireland. Therefore, we do look forward to the time when some of the big yards in Belfast will secure either the sister ship, or, if the Government finally decide to build two ships instead of one, that we shall get at least one. I do not think there is any doubt as to the capability of Belfast to carry out the work successfully. I am glad that in this Debate there have been no references made to statements which have from time to time appeared with
regard to the Government of Northern Ireland subsidising any shipbuilding companies. Those statements were misleading and untrue. When any of the Belfast shipbuilding companies enters into competition for the building of any of these ships it enters the market on the same level as all other shipbuilding concerns in Great Britain. That, I think, has been said once and for all, and in a manner very satisfactory to the people of Belfast.
There has been a lot of pessimism with regard to the building of this big ship. If the same ideas and the same pessimism had filled the minds of the directors of these great companies in the past there would never have been any large ships built. We cannot tell whether this ship is to be a success or not, nor could any other shipbuilding concern ever have said that any of its ships would be success. I was a very small boy when I first wrote in a copybook the words "Nothing venture, nothing win." That is what we are going to try again with this big ship. There is one thing which seems to have been forgotten in this Debate, and that is that the ship is largely constructed already and ought to have been completed long ago. I certainly think that the majority will welcome the fact that the work is being undertaken now. I am sure it is the desire of the entire nation that the ship will be a conspicuous success. The hon. Member for Dumbarton Burghs may rest satisfied that there is not the slightest jealously on the part of Belfast people because the ship is being built on the Clyde. We are delighted that unemployment is going to be assisted to that extent in that part of Great Britain, and we hope that in time our turn will come.

6.20 p.m.

Mr. BUCHANAN: When the Financial Resolution was being discussed I ventured, as one coming from the Clyde area, to offer some criticism of the Resolution. I claimed that those who were Members of this House had a right to criticise, and that it was our duty to criticise. In my case it was not an easy duty. I hope the House will give me credit for representing my constituency and my people as ably as most Members of this House represent their constituents. When a thing is not unpopular—indeed, is popular—in my constituency, if I oppose it it is from a sense of duty. The Labour party
have moved a constructive Amendment to the Motion for the Second Reading. It is an Amendment which has been prepared with great care and ability and I intend to vote for it. Without speaking in support of the Amendment, I would venture a criticism of the Bill itself.
I remember that the last time the Noble Lord the Member for Hastings (Lord E. Percy) and I crossed swords in Debate it was on the subject of patronage. The Noble Lord was then extremely critical of certain proposals in the Unemployment Bill which he thought might lend themselves to some form of patronage. I hope that the Noble Lord now sees that if ever there has been a display of patronage, it is in the proposal now before us. The Government are handing out forms of patronage, and each district is giving almost a contemptible display in trying to share in the patronage at the expense of other districts. If Wallsend gets, Birkenhead loses. If the Clyde gets the ship Barrow loses, and the prosperity of one, it might almost be said, is the misery of another. I never conceived it as part of my Socialist principles, to secure the prosperity of Gorbals at the expense, say, of South Wales.
When I heard the Financial Secretary say that we are not committed to go on with another ship, I asked myself what are the facts? This is a Bill which enables the Government to spend £4,000,000 on a second ship. The moment the Bill becomes law every shipbuilding Member of this House will press the Government to go on with the second ship. Each district will hope to get the order. The constant day-to-day grind and pressure will be there. The result will inevitably be that the Government will be brought into it. It has been said that to give this first ship a chance it is necessary to have a second ship, that the success of the scheme cannot be tested with one ship. We are told that while one ship is crossing the Atlantic going westward there must be another of similar size and speed doing the reverse journey.
The argument has been used from the Labour benches that this proposal will provide work. No one denies that. Last night an hon. Member urged the growing of bananas as a means of providing work. The late Mr. John Wheatley, when Member for Shettleston, used to say, "Start to dig a great tunnel to New Zealand and it will provide work." If the provision
of work is the main argument there is a much more formidable case for Admiralty ships than there is for this ship. The Admiralty ship is a nationally-owned ship. It is a ship of machinery. It is entirely under national supervision. It is very often built at a national yard, and practically every penny spent on it is spent on labour. If the demand is for work and work alone the Labour movement must support the building of armaments and a great fleet of ships.
There is to be £9,500,000 spent. Give that £9,500,000 to the unemployed and it will provide work. Every unemployed man would get a new pair of boots and a new suit, and to that extent he would be a richer and a better man. The money then will have been given to the people who needed it most. But the Government have chosen to do the other thing. One fact that has never been mentioned is that this company now owes the nation £1,000,000 of money, and it has never repaid one penny piece. The £9,500,000 is a large sum. When we asked for 3s. a week for the maintenance of a child the proposal was scrutinised and debated in minute detail. But here the sum is £9,500,000 for a company which owes the nation £1,000,000. If any Member of this House was owed £10 by another person, would he dream of extending his loan to £100 if no payment of the £10 had been made?

Mr. D. MASON: It would depend upon the security.

Mr. BUCHANAN: But the security here is the same as the security for the £1,000,000, on which the company has paid nothing. The company asks now for £9,500,000. What is the object? It is to build a great liner. We have been told again and again that it is to uphold the prestige of Britain. My ideas of prestige are different. I remember the late Mr. Keir Hardie saying that the prestige of a nation was not in its great ships, but in the happiness of its men and women and children in their homes. When these ships are built the nation's commitment does not end. Suppose that the nation puts £9,500,000 into this venture and it does not pay. The question will be asked at once, how can it be saved? The Government will then put in more money in order to save the money that is already in. It is said that there is good security for this money and that
it is good business. If so, what about the London money market? To-day, I am told, everybody is looking out for investments. The cinema trade is being ruined by overbuilding, because people are taking the risk in that trade, owing to the fact that there is no other outlet for their money. Every form of investment which can show the slightest return is being over-subscribed. But there is not a man in this House who, looking at this proposal and knowing its history, would put a penny piece of his money into it, and you have no right to do with the nation's money what you would not do with your own.
As regards the provision of work, in my view in the long run it will not provide any additional work at all. Take the reverse case and assume that these ships prove a success, and that you get your money back. You put on these two ships which are faster and finer than the ships which they displace. What does that mean to the workman? Unemployment. You put on two ships, two fine machines which move faster and carry more people than the existing ships. While you have succeeded in getting a certain number of men to work in the building of the ships for a year, in the ultimate resort you drive a number of other ships off the seas. Whatever else may be said for this scheme, taking the long view—as the Labour and Socialist movement is entitled to do—it will not ultimately fulfil even the function of finding more employment.
I make this last criticism. This will be a rich man's ship. Even what may be described as the comfortable section of the community, doctors and teachers and people of that sort, will not be able to travel on it. It will be outwith their means. It will be a ship exclusively for the extremely well-to-do. I ask hon. Members to look over the passenger lists of similar ships at the present time, and they will find that the overwhelming majority of the passengers belong, not to the middle class but to the extremely wealthy class. You are putting on to the sea a ship that can only be used by the rich.

Mr. LOGAN: Has the hon. Member forgotten that the ship will carry a crew, and that the crew will consist of men who are working for their living?

Mr. BUCHANAN: If that be the argument, why not start and build a mansion house? Every mansion house employs a staff of servants, and this is only a floating mansion house.

Mr. LOGAN: Does the hon. Member intend that we should remain in a stagnant state of society? We want to find work for these people who are unemployed, and this is a way of finding it.

Mr. BUCHANAN: The hon. Member says that this is a way. I say if that is so, why not build mansion houses?

Mr. LOGAN: Well, build them. I do not want them, but build them if you want them.

Mr. BUCHANAN: If that is to be the argument, then I suppose we shall have a campaign to help the poor millionaires by building mansion houses and thus employ a lot of people as servants and so forth. That is the kind of argument which I heard demolished when I was little more than a boy, and when I first came into the Socialist movement. I am not going to follow that line at all. I repeat that this £9,500,000 is for the building of a rich man's ship. At the moment there are a hundred and one more desirable ways of spending that money, each one of which would ensure the provision of ordinary work, and each one of which would give greater social value and would bring greater prosperity and happiness than this project.
As regards the number who are to be employed on the building of this ship, I think that the figures in all these cases are exaggerated. We are told about so many thousands getting work but there has never been any proof of that. It may be that it will employ 10,000 men but I remember that when the ship was previously under construction on the Clyde and when £1,500,000 was spent upon it, the figures for unemployment rose all the time. It may be that they would have risen higher if the ship had not been under construction but in connection with my own trade I hear rumours of What is going on. I am chairman of my union, members of which are in one of the trades affected. How many men did we get employed? Comparatively few. If you are taking money from the community for purposes like this, you can always push up the figure of those who will be given employment. I cannot dispute the figure of
10,000. If you made it 40,000 or 100,000 I could not dispute it, because I have no proof. Neither has anybody else.
Last night the Labour party—I think rightly—voted against the beet-sugar subsidy. It provides work. Once you embark on this business, there is no answer to the argument. "Why not a subsidy for coal, a subsidy for merchant shipping or a subsidy for anything else?" I say, taking all the aspects of the question into consideration, in my view there is here an organised public ramp. You are using the misery of 10,000 men; you are saying there is work here for 10,000 men who are miserably poor and you are using that as a pretext for taking £9,500,000 of public money. The same thing could be said about going into war. It could be said "There are to-day, so many thousands colliers unemployed. We will give them work, provided we can rob the State of a certain sum." To proceed along those lines is, I think, altogether wrong. If this nation must enter into shipping, and if we have £9,500,000 to spend, let us enter into it properly and let the country own the ships. Let this concern be run, as the Amendment suggests, as a national concern. But I object to this sum of public money being handed over to private enterprise to be used by them for whatever purpose they may see fit, while at the same time we deny the right of the community to own that which the community has provided.

6.40 p.m.

Commander COCHRANE: I am sure that all hon. Members recognise the sincerity of the hon. Member for Gorbals (Mr. Buchanan) in speaking as he has just spoken. As he has truly said, there are in his constituency many people who would be favourably affected by the construction of this ship. I feel that that makes it the more incumbent upon me to express the reasons why I support the proposal in the Bill because, excepting the constituency of the hon. Member for Dumbarton Burghs (Mr. Kirkwood) there is no constituency more intimately affected than that which I represent. Before coming to my reasons, however, may I mention one argument used by the hon. Member for Gorbals which I heard with great pleasure? He called attention to the fact that hon. Members representing shipbuilding areas had been suggesting the desirability that any
future ship under this proposal should be built in one or other of their constituencies. The hon. Member described that as an undesirable form of patronage. I agree, and I welcome his remarks, because I have never heard a more damning indictment of one of the evil results which would follow the nationalising of the means of production, if we ever committed that folly.
I pass from that point to state as briefly and as clearly as possible my reasons for supporting this Bill. There is, of course, first the question of the direct employment involved. I am not going to enlarge upon that aspect. Every hon. Member knows what it is for a district which has had bitter experience of unemployment, to find that things are becoming a little better, and I welcome the fact that I am able to support the National Government in a policy which is going to make things better for the constituency which I represent. Secondly, there is the question of prestige. I do not think that that is merely a matter of sentiment. It seems to me to be a matter of real importance that at sea we should retain the name and reputation which we have enjoyed in the past, because if we lose that we shall also lose the wherewithal to keep our shipyards going. That is of vital importance. We cannot build these big ships unless we can keep the confidence of the travelling public sufficiently to attract the passengers who will keep the ships employed. In this Debate speeches have been made as to the general principle which ought to be followed by the Government in a matter of this kind. I submit that this is not a case for the application of any general principle. We are not considering this proposition de novo. We are starting from the point at which this ship, having been partly constructed, having had £1,500,000 expended upon it, was abandoned on the slipway. We are not deciding here whether it is desirable or not to build big ships. We are far more directly concerned with the question of whether this particular ship now in a half-finished state, should be completed or not.
The third point which I wish to submit is this. I have mentioned already the advantages to constituencies lying near the shipyards in the Clyde. I do not think that is by any means the end of the
matter. Possibly from the national point of view it is not the most important aspect of the case. The Chancellor of the Exchequer is rightly regarded as the careful guardian of the public purse. When the Government, through the Chancellor of the Exchequer, say that they are in a position to support a proposal of this sort, the reaction throughout the country is enormously beneficial, and among the people who are encouraged by it are individual traders and producers. I should have thought that they would have had the support of my hon. Friend the Member for Gravesend (Mr. Albery), who appears to find many objections to this proposal. To me, apart from the direct advantage of getting this ship finished, the most important advantage is that it does in a very real measure restore confidence to producers throughout the country, and I believe that in the long run the indirect effects will be as valuable as the direct results of having this ship completed.

6.46 p.m.

Mr. PETHERICK: I have not heard, from any quarter of the House, except from those who represent shipping divisions, any real enthusiasm for this Bill. Naturally, from those who represent such divisions, there is a chorus of praise, with the exception of the speech of the hon. Member for Gorbals (Mr. Buchanan). There has also been praise from other Members representing shipping and shipbuilding divisions, in anticipation of possible favours to come. The hon. and gallant Member for Dumbartonshire (Commander Cochrane), who has just sat down, pointed out, quite rightly, that there was no question of principle involved in this matter; it was a matter of practice and of business. I am afraid that the Government and many Members of this House have rather found themselves in the position of a man who has put his head through the railings, who cannot get it back again, and who has to squeeze his body through in order to get away. This ship was laid down, a great deal of money has been spent on it, and in the circumstances, rather than that we should lose the prestige which we certainly should have lost by leaving the ship to decay, we have decided to finish it, with the consequent increase in employment which will arise.
The hon. Member for Gorbals seemed to object very much to the Bill on the ground that it was a bad investment, and I can understand that view. I think it is a hazardous investment, but at the same time both he and the hon. Member for Caerphilly (Mr. Morgan Jones) and his friends are always urging us, not only to take over all shipping companies, most of whom find themselves in an extraordinarily bad position now, but all the rest of the industries of the country, however unsuccessful and in whatever financial state they may find themselves. I join my voice with those of the hon. Members who, in the course of this Debate, have urged that the Government should say what information of a technical nature as to the advantages or disadvantages of these big ships the Government have at their disposal. I do not think it is entirely immaterial, merely because this ship has been laid down and is in course of construction. I think it is very important, and I think it is information which ought to be laid before the House. Up to date we have had very few details given to us of any kind, except those of a purely financial nature given to us by the Financial Secretary to the Treasury.
There are other points covered by the Bill, apart from the broad issue, to which I would like to refer. I should like to know why it is necessary to provide £1,500,000 working capital. Presumably, the two companies involved have a certain amount of working capital left. We know that they have had very bad times, in common with other shipping companies, but £1,500,000 seems a very large amount to advance as working capital to carry on with, in addition to the amounts that are being advanced for the completion of this ship and the amounts that may be advanced to build a sister ship. It rather appears as though this £1,500,000 is being advanced to pay off existing creditors of the two companies, and I should like to know if that is the case, because it is laid down in the Memorandum of Agreement that the assets will be taken over free of encumbrances.
On page 10 of the agreement, in the Second Schedule, there is a reference to £1,000,000 Cunard debenture stock secured by a trust deed in favour of a trustee or trustees nominated by the Treasury. It seems that it is a specific charge on the assets, and further on it
says it ranks behind the specific flotation charges. Where is the interest to be paid on this amount to come from? As I understand, it is unlikely to come from the reserved assets, and consequently it can only come from the interest paid on the capital of the merger company, on the 62 per cent. of the shares held by the Cunard Company. That is a small and rather technical point, but I hope the Financial Secretary will see that there is some provision with regard to the payment of profits, in the event of profits being made, otherwise I do not see where the interest on this sum is to come from. It would not be very satisfactory, supposing the merger company made a considerable profit and merely put it into reserve and did not distribute it. I cannot find any provision of this nature. I would like to say, in common with other hon. Members, that I think it is advisable to have some Government representation on the board—it may be only one member—simply to hold a watching brief. After all, the Treasury, and through the Treasury the country, is very largely interested in the fortunes of the new company.
Finally—and this is another technical point—perhaps the Financial Secretary would say why the terms on which we are advancing this money are not stated in the Bill. It seems to me that there is rather an unfortunate practice growing up of leaving this sort of detail out of the Bills which we have before us, so that when in future one is obliged to refer to them, one will have to consider also a large number of other documents. Although I feel very gravely doubtful about the steps taken by the Government in this matter, there are compensations for the dangers involved and the risks to the capital which the country is putting up. We are getting compensation in the form of more employment and of additional prestige, and in the form of the chances of gaining an enormous preponderance in the shipping trade of the Atlantic.

6.54 p.m.

Vice-Admiral TAYLOR: I rise to support the Bill, and I would like to congratulate the Government on the successful conclusion of their efforts over the last year to bring about a settlement
between these rival shipping companies. The last speaker has said that he did not look on the Bill as a question of principle. I very much hope that we may look upon it as one of principle, and a very important principle too. I take the action of the Government as an acknowledgment of their realisation of the great national importance of the shipping industry and of our mercantile marine to this country. If I may say so with all respect, many of the speeches which have been made this evening have been very parochial in character. They have been concerned as to whether the Government are quite certain that all this money is going to be paid back, that the interest is going to be paid, that the taxpayers' money is not being wasted, and that every precaution is being taken. It is quite right that when the Government advance money they should get security, and they have got security in this Bill.
We are deeply concerned about our shipping industry to-day. For centuries we have held pride of place, leading the world in our shipping, in the matter of ship construction, in the matter of the efficiency of the personnel, and in the lead which we have given to every other nation of the world in the matter of appliances for the safety of passengers and crew in the mercantile marine. Now, due to various causes, our shipping industry is in a very serious position. We have lost the leading position which we held, and it is not a question in this Bill as to whether the Government are endeavouring to bolster up some particular shipping company, or whether that company is to be kept going, or whether interest is to be paid on the money. The point is as to whether the Government are going to do something in order that we may be assured that the shipping industry of this country shall not be destroyed by the machinations of the foreigner.
Reference has been made to subsidies, and it seems to me that there are hon. Members of this House who are afraid of subsidies. The hon. and gallant Member for Gainsborough (Captain Crookshank), who I am sorry to see is not in his place, raised the point and said what a dangerous thing it was for this country to start subsidising our merchant shipping, and that it would create retaliation from the foreigner.
What nonsense. It is the foreigner who has started the subsidies, and unless we in this country are prepared to use subsidy against subsidy, there is no question but that our shipping industry will be destroyed by the foreigner. The hon. and gallant Member for Gainsborough is, I understand, a supporter of tariffs. The arguments which were used before tariffs were introduced were to the effect that the foreigner would retaliate, that we must not put a tariff against any foreign article because that would be very dangerous. Well, in point of fact, immediately we started our tariff policy in this country, the foreigners all came on their knees to make trade agreements with us, and they reduced their tariffs against us. That is a fact. The hon. Member for Orkney and Shetland (Sir R. Hamilton) laughs, but we shall laugh the longer, because that is a fact, and our trade is increasing enormously in consequence of tariffs. Exactly the same arguments can be put forward with regard to the use of subsidies for shipping. As soon as we start to use them, the foreigner will take notice, but until we do, he will do nothing.
As a matter of fact, this matter is of vital national and Imperial importance. I would remind hon. Members of what happened during the War, so far as our mercantile marine was concerned. The right hon. Gentleman the First Lord of the Admiralty, in a speech some months ago, drew attention to the enormous volume of commodities and foodstuffs which must be delivered day by day in the ports of this country. After the War, we made up our minds that never again should we be so dependent on the foreigner for food and other vital commodities as we found we were in 1914. But there is no difference in principle between relying upon the foreigner for food and relying upon the foreigner for the merchant shipping to bring that food here. If it is dangerous to rely on the foreigner for food, it is equally dangerous to rely on the foreigner for the shipping which is to bring the food to our ports. The whole of the strength and power of this country have been built up upon our sea power, and I am thankful that the Government are showing by this Measure that they have realised the importance of sea power, which implies a great mercantile marine as well as an
efficient Navy, in order that security may be given to this country. If we are not to have a mercantile marine, it is useless having a Navy; if we are not to have a Navy, it is equally useless to have a mercantile marine.
It is of the greatest importance, so far as this particular ship is concerned, that she should be built; we should at once regain the blue riband of the Atlantic service. There is a tremendous psychological aspect to this problem; people will travel by the largest and most up-to-date ship which is put upon the sea; no matter what it costs them, they will do that. It is absolutely essential for the future of the passenger traffic of this country that this ship should be built. The hon. Member for Gorbals (Mr. Buchanan) disagrees with this Bill, because he says that this is a ship built for rich people. I should not have thought that it mattered in the slightest degree to the hon. Member what the ship was built for, provided that the ship was built and gave employment to our shipyards and to the people employed in all the subsidiary trades throughout the country. I should have thought that every hon. Member of the Socialist or of the more extreme party, would be only too thankful to the Government for giving really productive work to industry. The hon. Member for Gorbals said that in his opinion it would be better to give the money to the unemployed for them to buy boots with. It would be much better to give the unemployed work, and productive work, so that they do useful productive work as well as buy boots and other things. I welcome this Bill as an indication of the policy of the Government, not only with regard to this big liner but also with regard to mercantile shipping in general; that the Government recognise that it is of national importance, and that the whole security of this country depends upon the continuation of our mercantile marine.

7.2 p.m.

Mr. MACMILLAN: I shall not attempt to deal at all with the questions of shipping policy raised in this Bill. It has indeed been a somewhat strange Debate to which we have listened to-day. The proposal to invest what may amount to about £9,500,000 has been admirably made by the Financial Secretary, who is a member of a party which has long been associated with the opposite financial
policy. The hon. Member for Dumbarton Burghs (Mr. Kirkwod) treated the House to an almost lyrical oration upon the glories of private enterprise. One of the most Gladstonian arguments which I have ever heard was put forward by the hon. Member for Gorbals (Mr. Buchanan); one might at least have expected him to be enthusiastic about any Bill which had anything to do with shipyards.
I rise to bring forward one or two other points of a more general character. I welcome the introduction of the Bill and shall have no hesitation in voting for it, but I recall just over a year ago that some of us in this House and outside began to urge upon the Government that from a general economic point of view a policy of increasing expenditure of capital upon production would be wise and salutary. At that time, of course, the Government were not able to meet us. We were told that it was necessary to conserve the national resources by every possible saving that could be made, and in spite of the growing difference between the rate of national savings and the rate of national investment, which is the main cause of the depression to-day, we had a continued resistance to any form of increased capital expenditure. Some hon. Members of the Government were sympathetic towards us, but on the whole the Government continued to follow a largely deflationist, and at any rate a careful, policy about fresh capital investment.
I take it, therefore, that this Bill marks the determination of the Government to end that policy. It can have no other meaning. I also hope, however, that if the Government are determined to end this policy, the Bill means that the Prime Minister and his colleagues, with the help of the best economical and technical advice available, have arrived at some kind of a definite plan as to the basis upon which they will embark on large capital expenditure; what is to be the order of precedence of schemes, which schemes are more socially or economically desirable or beneficial to the country than others.
I will not go into the technical questions raised in this scheme. I have no particular objection to Transatlantic shipping. It is rather a speculative business; so speculative that it has not
even frightened the ardent hon. Member for Gorbals to think that national money should be invested in this direction. I submit, however, that hon. Members are entitled to claim that, if the Government are to to say that the time has come to abandon the policy of conserving the national revenues and to embark upon a new policy in national expenditure, the House shall be given some kind of control over what new kind of movement the Government are to finance. We must be certain that, merely because someone says that something is a rather good scheme and £9,000,000 should be put into it, the Government do not say that they will not build any more houses, or clear any more slums, or continue to do other things which are more desirable than the new undertaking. Nevertheless, I welcome this Bill because it will be impossible for the Government in future to put up the orthodox strict deflationist defence line which during the last two years they have brought before the nation on other proposals.
Secondly, there is the question of the relation between the State and industry. I take it that in that sphere also the Government are prepared to move into a well-considered and carefully thought-out plan. There are two possible attitude: one is to maintain the old laisser-faire policy; to say that the Government are to have nothing to do with industry, that industry must solve its own problems, and that the Government are not to take any activity in that direction. The chief apostle of that view at present is the President of the Board of Trade, who has been absent from these Debates. Considering that this Bill more closely affects the Board of Trade than almost any Bill which one could imagine, I am rather struck by the fact that we have not yet been favoured by the Minister whom one might have thought was chiefly responsible for this matter. Nevertheless, that is one view which it is possible to take. I have sometimes been criticised because I have ventured to hold the view that the State can wisely adopt what one might call a helpful and co-operative attitude towards industry, but I did not go anything like so far as large investments of Government finance without control, such as are recommended by this Bill.
Nevertheless, I take it that the Bill means that we are to have some considered policy.
The best part of this Bill, in which we must support the Government and recognise that they have been successful, is that the President of the Board of Trade has all along made it a condition of financial support that there should be a rationalisation between the two companies engaged in Transatlantic shipping. We welcome the fact that the Government have persisted in holding to this policy of not giving financial support except on condition of the merger of the interests of these two companies. Whether the financial merger is sound I do not propose now to debate, but the principle on which the Government have insisted is sound. On the other hand, as in the first sphere, of capital expenditure, so in the second sphere, of the State and industry: if the Government are to take this particular attitude towards a particular industry, they cannot continue to resist the pressure which is put upon them to take some constructive notice of the other great industrial problems—those of iron and steel, coal, or textiles. They cannot preserve that purely laisser-faire attitude upon one side of the question and then embark from an entirely different point of view upon another set of problems.
I understand that the hon. Member who is to reply may not have authority to speak for the Government as a whole upon such grave matters. If, however, the Government are to survive the immediate work that they have done so admirably and effectively, and to carry out effectively the work of the next two years, that work must, both in the economic sphere and in the sphere of the relations of the State towards industrial reconstruction, be preceded by a coherent plan and not consist of a series of sporadic moves.

7.10 p.m.

Mr. TINKER: To return to the Amendment, only one speaker, the hon. Member for Caerphilly (Mr. Morgan Jones) has as yet emphasised its chief purpose. We do not take exception to the assistance of the building of this vessel, because it is providing work; but we ask the House to recognise the position in which the Government, when they have done that,
have put the country. We are providing money for a private enterprise without any control at all. We recognise in this House that private enterprise in certain spheres of work cannot carry on; yet, according to the Government's view, that work is essential. The Government want to hold that supremacy of shipping that has been held in the past, and owing to the failure of private enterprise the Government have to step in. Having recognised that principle, the Government ought to say that, if private enterprise cannot succeed, then for practical purposes it ought to get out of the way. The hon. and gallant Member for South Paddington (Vice-Admiral Taylor) made a very striking speech. He coupled the Navy and its function of protecting the trade routes with the work of the Mercantile Marine, saying that the Mercantile Marine ought also to be protected and to have money found for it. I wish, however, that the hon. and gallant Member had brought a little common sense to bear upon his remarks. The Navy is financed by public money and is under public control. If he says that the Mercantile Marine is to be under the same heading and that public money must be given for it, I entirely agree with him; it is essential that we should have supremacy in this respect. Having, however, recognised the failure of private enterprise, the Government ought to come to our way of thinking and say, "Very well, we agree with your point of view and we will take over control of all the business that is to be carried on."
I hope that the Prime Minister has recognised where he is being led this afternoon. Speaker after speaker from every side of the House, after lauding what the Government have done, has wondered how to get in his advocacy of his own constituency. At the end of every speech I have waited to hear the hon. Member recognise the debt that he owes to his own constituency and urge the Government to recognise its claims. The hon. Member for Wallsend (Miss Ward) made a very nice speech, but running right through it was the question of when Wallsend would get a share of the Bill. Other hon. Members followed on the same lines, and then reached the question of the whole shipping industry being subsidised by the State. The Prime Minister, therefore, whatever else he must recognise—and I am glad to say
that he has been here during practically the whole of the Debate—must recognise the drift of what is taking place in regard to the control of enterprise.
Surely hon. Members must all see now that owing to the exceptional conditions prevailing, no private concern can say how long it is going to carry on. Yet we recognise in this House that private enterprises must go on, and must have some subsidy. We cannot keep away from subsidising different enterprises—a subsidy for this, a loan for that, a grant for the other—on every hand, to keep up the supremacy of the race, or the nation. Every industry is calling for assistance. Yet hon. Members on the other side of the House failed to recognise that we must get money for each industry; they failed to recognise that we ought to adopt this controlling policy. We are urging that in this Amendment, for the latter part of it says
this House takes exception to a proposal to vote public money for the promotion of private shipping interests without any guarantee as to its repayment and without conditions for securing public control over its disbursement, a share in any profits which may accrue, or the ultimate conversion of the shipping industry into a national undertaking.
If the Government meant to do that we could agree with the proposal that they put forward. If private enterprise gets money from the Government, it ought not to be left in control. If the help succeeds, private enterprise gets the benefit; but, if it fails, private enterprise loses nothing, and the loss falls on the State. May I take hon. Members back to a historic Debate in 1923 when Lord Snowden, who was then Mr. Philip Snowden, moved a Motion in favour of Socialism? Lord Melchett, who was then Sir Alfred Mond, defended private enterprise, and it was his contention that when it failed to succeed on its own account it should cease to exist. To-day private enterprise can no longer carry on in many of the great industries, but it does not cease to exist there; it comes instead to the State for help. The State recognises the plight of these industries, and we on these benches, recognizing that men are in danger of being thrown out of work, sometimes forget our principles and support the State helping these industries in order to keep men in work.
In my own constituency works are being closed down and I could appeal to the State for a subsidy to help them carry on, and no doubt I should get some benefit for my constituency. That is not the way the House of Commons ought to look at the problem, however. We must take a broader view ante recognise what such assistance means to the State as a whole. I believe that the help that is being given by the Government in this instance may be made with the best intentions, but it is a step in the wrong direction. The State has no right to grant large sums of money to private enterprise without taking over control. If an industry is necessary, the State ought to have control of it. I hope that we shall be able to get into our Lobby a sufficient number of Members to-night to prevent the Government taking any step in this direction in future.

7.20 p.m.

Mr. CHARLES WILLIAMS: I will not follow the hon. Member for Leigh (Mr. Tinker), although I agree with him as to the thorough badness of these Debates in which we have pressure put on the Government from one private Member after another to get work for their constituencies. We have heard a great deal about the employment of men in the dockyards which will follow the granting of this subsidy by the Government, but are we to be assured that all the officers and men employed on this ship will be British? We know that some companies are good in employing British officers and men, and that others are not so good. There will be no excuse in this case, and we should have the clearest assurance from the Government that only British officers and men will be employed.
I would like to say something about a point that is exercising my mind. I have a definite objection to subsidies on the one hand and to inaction on the part of the Government on the other hand, and in this Debate I find it almost impossible to weigh up the objections to the subsidy and the objects to inaction on the part of the Government. There are many points in favour of the subsidy. There is the point that throughout our history shipping has been necessary for the protection of our prestige and that shipping is essential to an island nation. I agree, therefore, that it is important that in some way or other we have to do something for shipping. It is not a new thing
for shipping to be put on a different basis from all other industries. In the time of Queen Elizabeth the Government forced certain landowners to grow oak trees for the shipping industry. That concern for shipping has been shown through our history, and I am prepared to take a line with regard to shipping different from that which I should be prepared to take on every other subsidy.
We have heard all the bad points against subsidies pressed in this Debate. One hon. Member said he had nothing to do with shipping, but he wanted to ensure that if the merger took place there should be as little reduction as possible of the staffs of the two companies. What is the good of a merger unless it reduces overhead charges? There is no other use for it. Then we had a collection of speeches asking that the ship should be built at Belfast, on the east coast, at Liverpool, and at other places. Each hon. Member who spoke in this way apologised and said he did not want to press the Government, but on the whole he was certain that this sister ship should be built in his particular division. I am not blaming them. I am not going to ask for anything of that kind. As a matter of fact, there are two shipyards in my division, although hon. Members would possibly not know it because we are more modest than they are. We are here primarily to look after the interests of national finance.
I and many other Members supported the Government so that they could give us on the Floor of the House the best information that they have got. I am not speaking disrespectfully of the Financial Secretary or of the other Under-Secretaries because they know that I appreciate their capacity. The Financial Secretary is an absolute genius in the newspaper world and in other ways, and if I wanted to deal with that kind of thing I would seek his advice. I want on this occasion the advice of the best shipping expert I can get. I want to know if, as a supporter of the Government sent here to secure sound finance, I can get sound financial advice from the Government through a Minister who knows the shipping world inside and out. Nothing will induce me to vote for this Bill unless I have the opinion in the House of the President of the Board of Trade. We have a right to that. We
know all about the theory of Government unity, but it is one of the things that causes the House of Commons to lose in prestige when the Government contains a man of great and special ability and we do not have the privilege of hearing him on these points. It may be unpopular for me to say so and it may be disliked in certain circles. I am sure it will not be misinterpreted by the Financial Secretary. I have nothing against him or against whoever is to reply to this Debate. It is not in the interests of the National Government that, because of the weakness of the Opposition, they do not bring forward their chief and best people. I am not voting for a Measure of this kind until the House of Commons can be treated with the respect which it deserves. We have in the Government a great shipping expert, a man who knows exactly how the money ought to go and what is the best way of restoring the shipping industry; and we are being asked in this Bill to give something over £9,000,000 possibly—I say possibly advisedly—for the assistance of one or two ships. Whether that is the best way of helping the industry I do not know, but we have a right to have the opinion of the best authority in the House.

7.27 p.m.

Captain ALEXANDER BROWNE: This is the first time that I have had the privilege of addressing the House. The hon. Member for Leigh (Mr. Tinker) spoke of the failure of private enterprise. I would like to ask him why he considers that private enterprise has failed, because to me the position seems to be that foreign Governments have been giving large sums of money to help their shipping lines to carry on, and we have to do the same for ours. If we are to go on the basis of allowing other Governments to do that without doing anything to assist our own shipping industry, which is one of the vital industries of the country, it is time we stepped down. But we have no intention of stepping down. In the part of the world from which I come our people want to go ahead, and a subsidy is absolutely necessary in self-defence when other countries are paying them. France is paying shipping subsidies to the extent of £5,000,000 a year, and America to the extent of £10,000,000 or £15,000,000, and perhaps more. These things have to be taken into
consideration when we want to get this big boat finished. I am very glad that the Government are going to help to get it finished, and if they help in the building of one or two others as well, so much the better, because one cannot do the work. Two ships are needed, one going either way, on the Atlantic line.
We ought to back up our shipping industry more than we do. There has been quite a Debate on whether we should subsidise private enterprise. I hold that private enterprise in these matters has not failed, because we have always had the best mercantile marine in the world. We have not as large a percentage of the world's shipping now as we used to have, because of foreign competition and the subsidies given by foreign Governments, and it is our duty to hold up our own industries when they are menaced by foreign competition in that way. If another nation were to threaten us or to send a fleet against us we should back up our own people to the last penny, and we have a right to back up what is, after all, our staple industry, because without our mercantile marine we cannot exist. As one hon. Member has already reminded us, we have to bring such a large percentage of our food from across the sea that we require a mercantile marine second to one. I come from a constituency in which a great many working people find their occupation in the shipyards, and we rejoice that this work is coming among shipyard workers—in the sister isle—because it means that there will be fewer unemployed. The lending of this money to carry on the construction of this vessel on the Clyde will mean that less money will be paid out by the Government for nothing—for the unemployment insurance money is, to a large extent, money paid out for nothing. Here we shall be paying out money for something; because it is an asset to our State when we pay out money in wages. I have very much pleasure in supporting this Bill, and I hope that those who gain employment as the outcome of this action on the part of the Government will find constant jobs.

7.33 p.m.

Mr. DAVID GRENFELL: I am sure the House will thank me for expressing its appreciation of the gallant way in which the hon. and gallant Member for West Belfast (Captain Browne) has over-
come the ordeal of a maiden speech. It had evidences of a pugnacity which I am sure the House will get to know better in his subsequent interventions in Debate. I am in the same position as many other hon. Members who have expressed their anxiety this afternoon at the absence of information on this matter, and I join with them in asking for further enlightenment. If that request can be satisfied I am sure the whole House will be pleased, because there are apprehensions in the minds of many hon. Members over the irrevocable step which we are about to take. Hon. Members will have read the Bill, the Financial Resolution and the agreement between the shipping companies concerned. The language is correct and respectable, but it conveys very little information, even to those who are accustomed to reading such documents. I have read this document—Command Paper 4502—from the preamble right through, to the end, and I am still baffled. I understand in a general way that an agreement has been reached between two large shipping companies, and that having come to that agreement between themselves they later arrived at an agreement with the Treasury. The agreement with the Treasury provides for advances of money which may total £9,250,000.
All that is quite simple; but though there are words and phrases in abundance there is no real guarantee that we shall ever get repayment of these advances at any time. There is no real substance in any of the so-called guarantees, and in expressing my own dissatisfaction over that position I feel that I am also expressing the dissatisfaction of many other hon. Members who have spoken. The Financial Secretary to the Treasury will certainly assist the House if he will tell us what, to his mind, is the guarantee that we have. What I wish to know is, What shall we get in return for what we are to give? I would like to submit the following five questions to my hon. Friend, and I hope he will forgive me for putting them to him at this late stage: (1) What is the exact nature of the guarantee we are to receive in return for these considerable advances? (2) What policy is to be pursued to safeguard the Treasury against possible loss? (3) Is any limit contemplated for the new kind of risk which the Government have
undertaken? (4) Are we in this Measure incurring a risk of further commitments? (5) Is this to be regarded as an instalment of a plan for the modernisation of our liner fleets? Answers to those questions are vital to us in the consideration of this Bill. This is not a matter of expediency, something done to meet a temporary emergency; this is a vital decision on a policy which may carry us very far beyond the financial limits of this Bill. We have had speeches from shipowners which have given us fair warning as to the limits to which they wish to go. One hon. Member now sitting opposite has spoken very candidly on this question, and, having heard this Debate, we are very much more concerned regarding the real implications of these proposals.
The Financial Secretary to the Treasury criticised our Amendment in advance, but I am sure he will agree with me that it expresses a general apprehension felt in the House, as indicated by speeches which have come from hon. Members in all parties. I would ask whether this proposal is designed solely, or mainly, as an aid to employment, or does the policy of the Government carry them further? Have they in their mind's eye a much more comprehensive policy than the mere filling of a gap in the employment market, the mere provision of a sop to the unemployed for the time being, with no policy for their continued employment—I refer to the question of the modernisation of the liner tonnage of the country? We could understand a Government helping in the organisation of what is, after all, a very important national industry, embracing not only the large ocean liners—those sumptuous floating palaces—but the tramp steamers which are the mainstay of the sea for the people of this country. We might have had a policy for the scrapping of obsolete tonnage and the building of new tonnage to take its place in order to ensure the modernisation of our shipping fleet; but this Measure affords no hint of any policy in that direction.
Is this policy to stop after two ships have been built? If that is to be the end, then not very much will have been accomplished. If the men on Clydebank are now to be sent back to work only to find themselves out again after these two ships have been completed, how much shall we have gained in the long run?
The hon. Member for Dumbarton Burghs (Mr. Kirkwood) must have been driven almost to despair by the twin spectres, rivalling each other in their gauntness and their grim tragedy, furnished by the daily assembly of the unemployed at the Employment Exchange and the skeleton of the giant Cunarder, both bearing witness to the folly and anarchy of the competitive system, which we are now seeking to stimulate into fitful activity. We can sympathise with the hon. Member in his desire to see the men back on the ship, but, with the assistance of the wonderful machines now used in shipbuilding, the vessel will soon be off the stocks, and the hon. Member will then have to start his agitation all over again, and the problem of the unemployed will be as difficult as before, if not more difficult. The hon. Member who staked a claim for Belfast wants one ship, and we shall hear the voices of the Tyne and other shipbuilding centres in due course.

Captain BROWNE: I never said anything about a ship for Belfast, and I am the only representative from Belfast here.

Mr. GRENFELL: I was not referring to the hon. and gallant Member but to the bon. and gallant Member for Armagh (Sir W. Allen) who spoke earlier in the Debate and said that he did not know whether this big ship would pay. That is the problem. It is on account of the uncertainty regarding the earning possibilities of big ships that the Government have had to undertake this risk. If this had been a certain investment this Bill would not have been before the House to-night, because the London money market would have advanced the money to the companies readily enough. It is only because there is a risk that large ships cannot earn the money that this responsibility is being placed upon the State. I thought the hon. Member for Gorbals (Mr. Buchanan) made an excellent speech to-night on the question of employment. He revealed the fallacies which have appeared in the arguments of other hon. Members when he showed that this sum of money could have been spent much more beneficially by granting the unemployed an addition to their purchasing power. The unemployed people could make their own purchases if they had the purchasing power. If wages are paid—even from Treasury funds—to a man employed to
do work we are only enabling him to make purchases in the shops and we should achieve the same end, that of enabling the unemployed to make purchases, if we added directly to their purchasing power. I think the hon. Member for Gorbals put that point very clearly.
The hon. Member for Stockton (Mr. Macmillan) does not understand the Government's policy. He appears to be constantly hoping for some national system of planning and has endeavoured to instruct the House in his own views, and to instruct the country outside by the publication of a book on the subject. The hon. Member speaks with sympathy and with a great desire to alleviate the lot of the unemployed, but if he wants a national planning policy, or a policy at all, he must seek a new Government. This is not the kind of Government to avow a policy of planning. This is a kind of Government to make a start, as they have done, in a variety of directions and not to know how far they intend to go. In this instance we are not told how far they intend to go. The Government will go a very long way before they come to the conclusion, as we have done on this side of the House, that they have gone utterly in the wrong direction. That is why the hon. Member is likely to be disappointed. The Government have no policy or comprehensive idea of national planning, or, if they have, they have not taken the House into their confidence, and we await a further declaration on that policy to-night.
We do not put forward this Amendment as a mere formal gesture of opposition; we are concerned with dangers which the Bill effectively conceals. The language of the Bill is correct and respectable, but the principle underlying it is one of the assumption of the risks of a great industry by the State in the direct interest of a large company, and with only a possibility of bare repayment for the advances provided in the Bill. There is no safeguard or guarantee for the men who are to be employed on the ships, or assurance in a single line of the Bill that the pledging of the national credit will lead to prosperity in the shipping industry. We shall vote for our Amendment as an alternative to the Government's policy.
We join with hon. Members in all parts of the House in desiring to see the kind of planning which the Government have in their minds for the revival of shipping and for the upbuilding of an effective and efficient national fleet for cargo traffic and passenger traffic, but we do not believe that the shipping industry can be improved by building large, sumptuous floating palaces for the enjoyment of a limited class of people in this and other countries. The Government might as well guarantee the expenditure and undertake the risk of building half-a-dozen large first-class hotels in London. That would find employment for waiters and commissionaires, dressed in any way you like, and for the building trade. There would be employment for people in the indulgence of a limited class, but no guarantee that that kind of hotel would be successful. There is no guarantee that the floating luxury hotel, which this ship will be when completed, will confer a service upon the shipping industry. We urge the Government to consider the terms of our Amendment and to see whether we can fashion in this House a policy which will give the nation a voice in determining the course of the shipping industry and in providing that industry with a fleet which will hold the seas for many years to come.

7.49 p.m.

Mr. HORE-BELISHA: The hon. Member for Gower (Mr. D. Grenfell) habitually speaks with such clarity and unmistakeable intention that I must sympathise with him to-night in his endeavour to engage in a feat which is unusual to him, that of riding two horses at the same time. He was at once anxious to avoid the reproach of rejecting this means of employment, and to obtain credit for firm and unshakeable adherence to socialist principles. I am sorry, if there be in this Motion something of which he disapproves in detail, that he should use it as an excuse for chastising the Government as severely as he did. The hon. Member evidently forgets his own record and that of his hon. Friends in this matter—not that it is in the least blameworthy. He speaks to the House as if there were not behind him memories of many grants made at the expense of the taxpayer to private enterprise, of the nationalisation of which there was no question at the time,
whether it were the beet sugar industry or the railways.
He will forgive us if we have not taken up a policy which he himself, when in office regarded as perilous. He told us that the Amendment, to which he referred so equivocally and so half-heartedly that I am not yet sure whether he is supporting it or not, expressed the apprehension of the House on this Measure. If there be any apprehension it is lest the Amendment advocating nationalisation should ever, in a day more fortunate for himself though less fortunate for other people, become the established practice of this land. I recognise that the question whether or not our position upon the Atlantic should be a subject for governmental action, whether or not there should be a unification of our interests upon that ocean, and whether or not we should embark upon a policy of big ships, are matters of judgment and opinion.
I do not flatter myself that even if I repeated such arguments as I have been able to adduce in moving the Second Reading of the Bill—I now ask the indulgence of the House, speaking as I do for a second time—and if even I were to supplement them or embellish them with every example and illustration that my ingenuity could command, I should persuade such hon. Friends of mine as the hon. and gallant Member for Gainsborough (Captain Crookshank) that the matters to which I have referred are desirable. Nevertheless, the prestige of our shipping position has been a matter of concern to previous Governments, and we are not ashamed to follow in that tradition. We believe that in this instance that prestige can be most effectively and practically secured by a unification of the two interests which now sail the Atlantic, and accordingly we have decided to assist the formation of this merger company.
It must be obvious to the House that large economies will ensue. That is but one of the advantages of adopting such a Measure. It must be obvious that there will be a reduction in overhead costs, that the organisation will be simplified, and that the offices can be amalgamated, to say nothing of the additional advantage which we achieve by enabling this company to stand up
against the rivalry which it has to encounter from foreign nations. We did not embark upon such a policy spontaneously and without advice. We did not come down, as has been suggested in one or two critical speeches this afternoon, to hurl this proposal at the stunned heads of hon. Members. The complaint about us hitherto has been of our delay, and we cannot now be reproached with having failed to consider the pros and cons and the alternatives of such a policy.
The hon. and gallant Member for Gainsborough, who is so ingenious and yet so witty, asked me to prove conclusively to the House that a big ship was better than a smaller ship. He said that, failing the appearance of any one who knew anything about the subject—a claim which he did not make on his own behalf—to defend me, he would look upon me to defend myself and to satisfy the House that large was greater than small. Happily there appeared out of the earth, as it were, a veritable army in my protection. The hon. Member for Southampton (Sir C. Barrie), whose shipping interests are so vast, and whose experience is so great, was joined by the hon. and gallant Member for South Paddington (Vice-Admiral Taylor), who, at any rate, does know something about the sea. They explained to the hon. and gallant Member for Gainsborough the real advantages of the big ship. What better justification could we have than that the Cunard Company, holding the predominant position which it does, is of opinion with all its knowledge and experience that the big ship is better than the small? I should have thought that their argument upon this point and their view upon the matter would be conclusive, when it is joined, as it is joined, by the similar view of other experts who have been consulted. I do not think that we can be blamed for following the best advice that was open to us.
The criticism of the big ship relates, of course, to the volume of traffic which it has to carry. This brings me by an easy transition to the speech of the hon. Member for Caerphilly (Mr. Morgan Jones) which was not in the least overstated but was admirably, cogently, and statistically argued. He was in some difficulty in relating his premises to his conclusions, for he did not forget that
the first part of his Amendment was a compliment to us for having found so much employment, a part of the policy of which he approved. All that he would do would be to deny to us the means of carrying it out. Though the scheme was so admirable in outline and apart from the details, and he was so anxious to support it, he thought that it was inevitably destined to failure. Why? There recurred at proper musical intervals throughout his discourse the refrain that we were confronted with "the staggering fact of declining traffic," a statement which he amplified by reference to the best informed authority and the most reliable figures. Having demonstrated that there had been—which nobody was disposed to contest—a decline, even a staggering decline, in traffic, he made a remonstrance against the Government that the late Mr. W. Graham, introducing the Insurance Bill to cover the Cunarder, told the House that the Cunard Company only required that insurance before proceeding to build. Why, having been told that by Mr. Graham, the hon. Gentleman asks me, are the Cunard requesting something more? His own refrain supplies the answer; something has happened since those balmy days of the Government of hon. Gentlemen opposite—there has been "the staggering fact of the decline in traffic."
He asked me why, if there were credit difficulties at the time when the Cunard work was suspended, those credit difficulties should operate to-day. But something has happened in the meantime to the shipping companies, who have been under very heavy weather, for there has been, if I may quote the hon. Gentleman again, "the staggering fact of declining traffic." He asked me if I could assure him that these loans would be repaid in full, to the last farthing. Of course, if "the staggering fact of the decline in traffic" becomes a permanency, his prognostications may prove correct, and shipping will not be so profitable as we trust it will be. I can give the hon. Gentleman no absolute guarantee as to the future. It is easy to make promises when you are dealing with the time to come, but the time to come can only demonstrate whether our hopes are falsified or not, and there is no reason to assume, in my judgment, that the traffics on the Atlantic will not improve as conditions improve generally.
That, at any rate, is an aspiration; it is not a prophecy. Having decided that that conditions would not improve, the hon. Gentleman turned to an examination of the finances of the Cunard. He spoke of their reserve funds, and, I believe, actually quoted from some previous balance sheet. He wanted to know—

Mr. MORGAN JONES: No; I did not quote any figures with regard to reserves.

Mr. HORE-BELISHA: I said I believed that he quoted the figures, but he spoke—

Mr. JONES: I was referring to gross revenue.

Mr. HORE-BELISHA: I think his suggestion was—he will correct me at once if I am wrong—that the Cunard Company might have reserve funds of its own to dispose of; why did it not use them?

Mr. JONES: indicated assent.

Mr. HORE-BELISHA: am glad to have the hon. Gentleman's concurrence in that. The answer is that the Cunard has already expended nearly £2,000,000 on No. 534 out of its own resources and have not felt able to draw upon them further to continue operations. If they had done, there would have been no question of coming to the Government, and surely the hon. Gentleman must be impressed, as other hon. Members have been, by the desirability of rescuing this hull from ruin and enabling it to be completed into the structure originally designed. The hon. Gentleman also, as regards the finances of the Cunard, feared that our debentures would not stand at par, because, he told us, there was a discount on the first debentures, which have precedence over our own. It is perfectly true that there is a slight discount upon the first debentures of the Cunard, although the interest, I believe, has been regularly met, and we are concerned here with the interest rather than with any market quotation, particularly as our debentures will not be quoted on the market at all. All that we have to satisfy ourselves upon is whether or not we are provided with adequate security. The existing Cunard debentures are secured by specific mortgages on certain of the ships. These ships will be transferred to the new merger company free of encumbrances, but the Cunard will receive, in place of them, 62 per cent. of the shares in the
merger company, and the whole of the assets of the Cunard after the merger—these and its other assets—should be sufficient, or at any rate reasonable, security on which the Government might advance £1,000,000.

Mr. JONES: Might I ask the hon. Gentleman one question? Is it not true that these 15 ships have been transferred from the Cunard Company to the merger company? Does the hon. Gentleman argue that that transfer of the 15 ships will not have a deleterious effect upon the value of the Cunard shares in the market?

Mr. HORE-BELISHA: I should think that exactly the contrary would be the case, because, first of all, there comes, through the Government advancing it, to the Cunard Company, £1,000,000; and, for that sum together with their ships, the Cunard Company will have a 62 per cent. interest in the new merger company, which is provided with other assets. I should think, therefore, that the answer to the hon. Gentleman's question would be exactly the reverse of what he anticipated it would be, and I should have thought that that was so upon the simplest mathematical principles. Having examined the finances of the Cunard, the hon. Gentleman assumed that—

Mr. D. GRENFELL: Will that interest which the Cunard Company will have in the merger company be available for the ordinary shareholders of the merger company?

Mr. HORE-BELISHA: Certainly; any dividends received by the Cunard Company are at the disposal of those who have claims on the Cunard Company—firstly the debenture holders, and then the shareholders. I trust that that is a clear answer to the hon. Gentleman. I was about to say that the hon. Member for Caerphilly assumed that the interest on our advances as a whole would only be payable if there were profits. In that, of course, he was mistaken, and I am anxious so to inform him. The interest on all our first charges, and on our second debentures in the Cunard, is payable as an absolute obligation; no question of profits arises there. As the hon. Gentleman asked his question quite genuinely, I have given him an answer quite frankly, trusting that it will remove any doubt that has been troubling him.
Having dealt with the finances, the hon. Gentleman desired to know what would be the character of the shareholders. He spoke of foreign interests; and his curiosity made a sufficient impression upon my hon. and gallant Friend the Member for Gainsborough for him to insist that I should reply. Whatever foreign interests may now exist in the Oceanic Company, it is specifically provided, or it will be provided, in the memorandum and articles, that the merger company shall be and shall remain under British control. It is not necessary to examine the details of the present shareholding in the Oceanic Company; I trust that that absolute assurance on my part will appease any qualms that the hon. Gentleman may have had.
He next wanted to know why we were not to be represented upon the board, and here he was supported by my hon. Friend the Member for East Aberdeen (Mr. Boothby) and by the hon. Member for East Edinburgh (Mr. D. Mason). I endeavoured as lucidly as I could, in moving the Second Reading, to explain that we are mortgagees, and not shareholders; and it is not customary for a mortgagee to administer the property. That, I think, is a well established principle. I might add to that that we are not shipowners, and here I would repeat again a very convenient phrase used by the Leader of the Opposition—the Cunard Company know most about their own business. We trust them—if we did not trust them we should not be advancing this money—to conduct their fleet in the most economical manner possible. Their accounts will be open to us, and they will give us all the information that we may require.

Mr. BOOTHBY: No one ever suggested for a moment that the Government did not trust the Cunard Company. I imagine that they trust the Anglo-Persian Oil Company also, but in that case they have representation.

Mr. HORE-BELISHA: That is an entirely different matter. I do not want in the least to be dogmatic, but I was genuinely interested, and I think the House as a whole was, by my hon. Friend's philosophic examination of the future relationship between government and industry, and I think that is a matter which has to be thought out. Various methods will be adopted, of control or
otherwise, whatever may be thought suitable. I do not want to lay down any hard-and-fast rule, but I think that in this particular instance we have found the best method of control in the national interest.

Mr. ALBERY: If we are only mortgagees, how is it that the A debenture stock, in case of liquidation, only ranks pari passu with the ordinary shares of the merger company?

Mr. HORE-BELISHA: My hon. Friend, who has such a vast experience of companies, knows that his question does not in the least destroy what I was saying. I shall examine before I sit down, with the greatest conciseness I can command, our situation in relation to the merger company, but I should like first to continue to deal seriatim with the points that were raised. The object of the board will be to operate, as one single unit, the North Atlantic fleets, which are now divided into two. The board will therefore take over a number of ships, some of them obsolescent, as my hon. Friend the Member for East Aberdeen pointed out, following the informative speech of my hon. Friend the Member for South-East St. Pancras (Sir A. Beit). If the board is to be the one single authority, it must take over all the ships. It cannot expect to leave behind in the hands of the existing companies all the ships which are of no use, and only take those which are of use. The board will take all the ships. It will then examine what ships it requires, and it will have the benefit of selling for scrap the ships that it does not require. It is an obviously logical sequence, from the conclusion that all the ships should be under one control, that this new merger company should have vested in it all the ships, whether they be good, bad or indifferent.
I come now to subjects of greater detail, and I trust that the House will find my arguments sufficiently in sequence. My hon. Friend the Member for Gravesend (Mr. Albery) wanted to know whether it was a condition of the grant we were making that the company should proceed with No. 534, or whether they could have built other vessels. The answer is that the 534 was half built, and that is what the company desired to complete. It is for that reason and for no other that the 534 is referred to in the
Agreement. My hon. Friend the Member for East Edinburgh (Mr. Mason) desired to ascertain the reason why the option to the merger company to redeem debenture stock in multiples of £10,000 should not be reciprocated, so that the Government itself might enjoy a similar option. It may be better in the interests of the Government that the company should set aside money for depreciation and reserves than that we should claim sums in repayment at times which may not be convenient. The clause to which my hon. Friend referred was agreed to by both sides and is perfectly satisfactory to the Treasury. The hon. Member for Dumbarton Burghs (Mr. Kirkwood), who has been such a pioneer in this enterprise, has asked me whether the fair wages clause would apply. The answer, to use a common Parliamentary form, is in the affirmative.
The hon. Member for Penryn and Falmouth (Mr. Petherick), like the hon. Member who has just spoken and my hon. Friend the Member for Gravesend, were in some doubt as to how we stand exactly with regard to these debentures, and I think there was some misapprehension. The first £10,000,000 of Cunard second debenture stock is a second charge upon the Cunard assets, ranking immediately after charges given to secure the existing first debenture stock. It is a misapprehension to think, as I believe my hon. Friend did, that this is not an absolute obligation upon the Cunard Company. It is an absolute obligation upon them, and it is secured by their investments and by their holding in the merger company. The merger company's first debenture stock, of which we take £1,750,000, is a first mortgage upon No. 534. The £1,000,000 of income debenture class A stock, like the £750,000 of class B stock, is a second mortgage upon 534. The working capital which we are advancing is not for paying off existing creditors of the Cunard Company or anyone else. I trust that that simple analysis of where the capital is secured will satisfy my hon. Friend's curiosity.

Mr. PETHERICK: The point that I was trying to make was with regard to the interest on the £1,000,000 which was advanced directly to the Cunard Company. Where does the interest on that £1,000,000 come from? Suppose a profit should be made by the merger company and they
should decide not to distribute, the Cunard will have presumably no money coming in to pay for interest on that £1,000,000 advanced direct to them.

Mr. HORE-BELISHA: I am sorry that my hon. Friend still has any doubt left. I thought I had said that this was an absolute obligation upon the Cunard Company charged upon all their assets, their investments, their buildings and other resources, and, if they do not receive any dividend from the merger company, they have other resources out of which they can pay the interest upon this loan. My hon. Friend may depend upon it that the Treasury has well examined that matter and is satisfied that the security is reasonable and the interest is likely to be forthcoming; otherwise, they would not have made the proposal to the House.

Mr. D. GRENFELL: On the assumption of losses being made by the separate Cunard Company and profits being made by the new merger company, is there any guarantee that the independent Cunard Company has means of access and control over the profits of the merger company?

Mr. HORE-BELISHA: The Cunard Company, of course, has a majority holding—62 per cent.—in the merger company and therefore a deciding voice. Does that satisfy the hon. Gentleman?

Mr. GRENFELL: indicated assent.

Mr. HORE-BELISHA: I now think I can claim to have answered the five specific points that the hon. Gentleman put to me. What is the exact nature of the guarantee? I have answered that question. Is any step being taken to safeguard the Treasury against loss? I think I have answered that. Only the future can show whether or not the security proves adequate and whether the company will be prosperous enough to meet all its obligations. Is there any limit of money? £9,500,000. Are there any further commitments? No. Is it our policy to modernise the Atlantic fleet? Certainly, and this Bill is a proof of our intention.
I should like to address one word to the House upon what the hon. Member for Gorbals (Mr. Buchanan) calls patronage. I regret to have to inform the hon. Member for Wallsend (Miss Ward), persuasive and pleading as she is and en-
titled to all the benefits that she can get for her constituency, that this company is going to be run upon commercial principles, and, if it is decided to have a sister ship, no right is reserved for placing the order. I repeat that commercial principles alone will be taken into account. The same answer applies to the hon. Member for Armagh (Sir W. Allen) and to others whose constituencies are seeking for these favours to come. I will leave the argument of how suitable this question of patronage is in the mouth of the hon. Member for Gorbals to be answered, as it was so effectively answered, by the hon. Member for Dumbarton in view of his contiguity to the place where the ship is to be built when he said that, if this was an illustration of patronage helping one shipping company and bringing it within the sphere of Parliamentary questioning, how much more patronage should we suffer under if every industry were nationalised. I hope I have dealt with every question, however complicated, which has been addressed to me. At any rate, I trust that I have forgotten none.

Mr. C. WILLIAMS: rose—

Mr. HORE-BELISHA: I did not endeavour to answer any question addressed to me by the hon. Member for the simple reason that he stated in the most categorical language that he could command that nothing that I said and that nothing that anyone said except the President of the Board of Trade would lead him to vote in favour of the Bill. Therefore, I trust that he will not waste the time of the House and put me to any inconvenience by asking a question the answer to which can have no effect whatever upon his parti pris. I have not addressed myself to the more general question raised by the hon. Member for East Aberdeen and the hon. Member for Stockton (Mr. Macmillan) when they spoke about future policy. We are concerned here with present policy, and such criticism as we have undergone makes us realise all the more that the courage that we have shown in undertaking this policy and the confidence that we have, which is unshakable, in the ultimate recovery of British industry is rightly placed.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 194; Noes, 30.

Bill read a Second time.

Bill committed to a Committee of the
Whole House for To-morrow.—[Captain A. Hudson.]

Orders of the Day — BRITISH HYDROCARBON OILS PRODUCTION BILL.

Not amended (in the Standing Committee), considered.

CLAUSE 1.—(Preference for home produced light oils.)

8.34 p.m.

Mr. BATEY: I beg to move, in page 1, line 7, after "manufactured," to insert "under State ownership and control."
My task in moving the Amendment has been made much easier after the Debate and the Division which have just taken place. The House has just decided on a vote to give £9,500,000 to the shipping industry, and last night it voted £1,500,000 to India, £11,000,000 voted in two nights. Under the new industry to be set up in regard to the extraction of oil from coal, £11,000,000, if used under State ownership and control, would bring new life to the coal industry. We do not agree with the Government in encouraging this new industry to be exploited by private enterprise. We want the new industry to be owned and controlled by the State. It is an industry with big possibilities, and we believe that if the State owned and controlled it it would prove to be a real remedy for the position of the coal industry at the present time. I have three main reasons for moving the Amendment in favour of State ownership and control: (1) that the Government are allowing this new industry to be exploited by private enterprise, (2) that it is being divorced from the coal industry, and (3) that this action will not prove a cure for unemployment in the mining industry. On the 17th July last the Prime Minister made a statement in the House which raised exceedingly high hopes in the country of a cure for unemployment in the mining industry. May I remind the Committee of the words he used?
This particular plant which we have in mind will be capable of producing … 30,000,000 gallons a year, and will consume 350,000 tons of coal a year, giving employment to over 1,000 miners, in addition to the employment in connection with the plant."—[OFFICIAL REPORT, 17th July, 1933; col. 1533, Vol. 280.]
That statement raised high hopes that this new big industry would come to the relief of unemployment in the mining industry. High hopes were raised in the distressed mining areas where huge num-
bers of miners were unemployed. They believed that they saw in the words of the Prime Minister some immediate solution for unemployment in their industry. Imperial Chemical Industries are erecting the plant, but it will not be completed until July, 1935. From July, 1933, when the high hopes were raised, until July, 1935, is a long time for the unemployed miners to wait. When we are looking forward to July, 1935, it seems a long way off even from to-day. If the unemployed miners have to rely on what was promised last July they will have to wait a considerable time before there will be any help for them.
We urge State ownership and control of the new industry because we want it to be properly developed. If we are to wait for more than another year before anything arises in that new industry it means that we shall have too long to wait. If the State would take the new industry in hand it could be developed far more quickly. For some time it has been proved that the extraction of oil from coal, either under the low temperature carbonisation process or under the hydrogenation system, is a commercial proposition. Seeing that it is a commercial proposition we hold that it ought to be developed with a view to helping unemployment as rapidly as possible. We press for State ownership and control because we believe that this new process is going to be captured by private enterprise and become a monopoly, and we oppose monopolies. When there is a danger of a monopoly in this country we believe that it is far wiser and safer to have the undertaking under State ownership and control rather than have the monopoly in private hands.
The new industry will be a monopoly because the cost of the plant is so heavy that scarcely any other company will be able to find the money to put down the plant. Imperial Chemical Industries are putting down a plant which will cost £2,500,000. There are very few companies, if any—certainly they are very rare—that could afford to put down a plant costing £2,500,000. One of the troubles in the coal industry to-day is that so many colliery companies are extremely poor and cannot afford any large expenditure upon the extension of their present plant or in connection with any new industry. Therefore, Imperial
Chemical Industries will have a monopoly, because no other company, as far as I can see, will be able to spend so much money upon plant for extracting oil from coal under the hydrogenation system.
Imperial Chemical Industries will have an advantage over any other competing industries, even if there were any other competing industries that could find the money for the plant, in the fact that they have the patent rights for the royalties. When the Labour Government were in Office and there was a Labour Minister of Mines I put a question to him, because I had seen a report in the Press about the International Hydrogenation Patents Company. This is what the Minister said in regard to the International Hydrogenation Patents Company:
The company has not been registered in this country but has its headquarters on the continent and as is to be expected in a company of this kind its directorate is international. Imperial Chemical Industries, Limited, have a particular interest in the patents rights in this country.
Therefore, it seems that Imperial Chemical Industries in beginning the new undertaking under the hydrogenation system have an interest in the patent royalty rights, and we ought to know what amount of royalties they will pay to the International Hydrogenation Patents Company. If the new industry was State owned and State controlled there would be no concealment regarding the royalties paid. So far we have been unable to find the royalties to be paid by this company to the international company. The House is entitled to the information; it should be known, so that any company which desired to commence this process would know the amount of royalty they would have to pay. I hope the Secretary for Mines will be prepared to tell us the amount of royalty which Imperial Chemical Industries will have to pay to the international company.
I further submit that under State ownership and control this new industry would not be started independent of the coal industry. When the Government made their first announcement the impression was that this new industry would help the mining industry. A much better way would have been for the State to take over the ownership and control so that it would not be run independently of the coal industry. Imperial Chemical
Industries is away from the coal mines. We want this new plant at the collieries. If it was started in connection with our coal mines the revenue derived from coal would help to build up miner's wages. That has always been our hope, but under this Bill that hope is being destroyed. The extraction of oil from coal under the hydrogenation process is being commenced away from our collieries, and once that is the case there is no hope for the mining population. Also, if this new industry was State owned and controlled the State would pay a fair price for the coal. We know that a company like Imperial Chemical Industries will want cheap coal. As a matter of fact, it has been stated in the Press that their hope is that they will be able to get coal at a cheap price. Cheap coal means low wages to the miners. We object to coal being supplied to any industry at a price which means low wages for our people. There is no hope for the miners under this Bill unless the House agrees that this new industry should be State owned and controlled, neither is there any hope for better wages; and there is very little hope from an employment point of view.
We are told that Imperial Chemical Industries will be able to produce 30,000,000 gallons of oil per year, which will take 350,000 tons of coal, and give employment for 1,000 miners. With nearly 400,000 miners out of employment 1,000 miners is a mere fleabite. We want a development on a far larger scale, and we believe it could have been done, and would have been done, if the Government had taken over the control of this new undertaking. To-day the estimate is that this company will use 350,000 tons of coal and give employment to 1,000 miners, but it may be that before the plant is finally erected developments in the use of machinery may mean that they will not need 350,000 tons of coal or employ 1,000 miners. That has been our experience in the iron and steel trade, in gas undertakings and in electricity undertakings. Because these undertakings are privately owned we have been dragged at their heels; and our pople have suffered. This could be avoided if the new industry is owned and controlled by the State.
In the iron and steel trade the coal consumed in 1920 was 30,500,000 tons, but in 1932 it was only 12,000,000 tons. The same experience occurs in gas under-
takings. The amount of gas sold between 1920 and 1932 increased by no less than 54,000,000 cubic feet, whilst the amount of coal consumed by gas undertakings decreased in the same period by 500,000 tons. It is the same in the case of electricity undertakings. Since 1921 the output of electricity has increased by over 165 per cent., while the quantity of coal used in generating electricity has increased by only 37 per cent. We cannot afford, with the huge number of miners at present unemployed, to continue to rest upon private enterprise. We are bound to plead for State ownership and control. We believe that the only cure for unemployment in the coal industry is State ownership and control, and that it is also the only cure for low wages. When we have such an opporunity as this, the commencement of a new industry which may develop into an enormously big industry, I urge the House not to allow it to go into private hands but to take their courage in both hands and insist upon this undertaking being owned and controlled by the State. In an evening paper to-day I read a speech of the Prime Minister at the Crystal Palace in which he said:
Every step the Government are taking has been a safe step in the whole scheme of progressive evolution.
I do not know whether the Secretary for Mines is prepared to say that the handing over of this new undertaking to private enterprise is a progressive evolution or not. I would not call it progressive evolution. In my opinion it is a step backwards. Experience ought to have taught us that in a new industry like this, so big with possibilities, an industry that could be so much to the mining industry, the only guarantee for the mining industry is for the new industry to he owned and controlled by the State.

8.56 p.m.

Mr. T. SMITH: I beg to second the Amendment.
Whatever the opinion the House may have on this matter of public ownership versus private ownership, we can all agree that the mining industry is in need of some outlet for its coal. The output for 1933 was between 75,000,000 and 80,000,000 tons less than in pre-war days. I hope that no one will try to
prove that this Bill is likely to restore prosperity to the mining industry. The Bill gives for a number of years a preference of not less than 4d. a gallon—

Mr. DEPUTY-SPEAKER (Captain Bourne): The hon. Member is now dealing with a subject that could more appropriately be discussed on the Third Reading of the Bill.

Mr. SMITH: With all respect I intended to link up my arguments straight away with the Amendment. A preference is given of not less than 4d. a gallon for the specific purpose of encouraging the production of oil from coal, and the difference between us is as to how best to exploit the new industry. It has been argued that the preference will encourage the production of coal to the extent of many millions of tons a year. I think that that estimate is exaggerated, and that the most we can expect is to increase the production of coal by 2,000,000 to 3,000,000 tons a year when this industry is fully developed. We are not discussing the relative merits of public ownership as against private ownership in the wide sense. We are discussing an Amendment which says that the production of this oil ought to be publicly owned instead of privately owned. This preference is given not merely to the hydrogenation process; it is given to the production of any light hydrocarbon oil, whether from coal, shale, or peat or from the derivatives. That being so, we think that the process could be exploited better under public ownership than under private ownership. When this matter was discussed in Committee we were told that our proposal was not acceptable for certain very definite reasons. One of the arguments used against public ownership is that private ownership is prepared to take risks that public ownership would not permit. Having some knowledge of the progress of certain processes which this Bill is designed to encourage, I am entitled to say that it would have been a good thing for many investors in this country if there had been less risk taken and more thought given before people were asked to subscribe their money.
I am one of those who agree that there is a future for the extraction of oil from coal. I think that if the matter is
properly tackled we can increase the output of raw coal for this purpose by many tons, but I am in doubt as to whether private ownership can do it. If you are to have the hydrogenation process, low temperature carbonisation, shale, peat and many other processes all left to their resources to make the best of their own concerns without taking into account the national requirements, we are likely to have the same competitive muddle as we have had in the mining industry and other industries.
On the Second Reading of the Bill the Secretary for Mines quoted two resolutions passed by the Miners' Federation of Great Britain. Those resolutions were quoted in order to show that the Miners' Federation was speaking with two voices. The Secretary for Mines quoted one which stated that while welcoming the decision the federation urged public ownership. The second was that the Miners Federation viewed with concern the decreased production of coal and welcomed anything that would encourage the production of more coal. I hope the Secretary for Mines will not misunderstand the attitude of the Miners' Federation. The miners are deeply concerned with this and other matters, because they see the deplorable state of the industry; but since the Second Reading of this Bill the federattion has issued a statement which has received a good deal of publicity. It is called "A Plea for a National Fuel Policy," and in that very excellent booklet, while dealing with certain phases of losses of coal output, the federation urges that what is necessary in this country is some national planned fuel policy dealing not merely with the extraction of oil from coal, but also with the question of pulverisation and things of that sort, which this Amendment will not permit me to discuss.
Therefore we say that the difference between us is as to how best to exploit the position. The Secretary for Mines stated that the story of the production of oil from coal read like a romance. I think there is a future for it, but that you must have some national plan and not higgledy-piggledy production. There must be foresight and control. It is because we believe that that can be ensured better under public ownership than
under this Bill that we bring forward this Amendment.

9.3 p.m.

Sir WILLIAM WAYLAND: The question is private ownership versus public ownership. Can either of the two hon. Members who have spoken point to any industry that has been handled by the State and has been a great success?

Mr. BATEY: Yes, the Post Office.

Sir W. WAYLAND: The Post Office. Sitting opposite there is the most up-to-date Postmaster-General. In spite of that, we know perfectly well that if we want to develop an industry we have to leave it in private hands. What can the State do in this respect? There are already one or two patents, or three or four, in connection with low temperature carbonisation of coal and hydrogenation. There will be 20 patents yet, for this thing is only in its infancy. Is the State going to take the risk? What would the state do? It would start an installation, and that installation in 10 years' time would be just as advanced as it is to-day. Take the case of competitive companies. You are bound to have competitive companies. What is the result? There is striving to get the most perfect process possible. In that striving they are going to develop the industry to a far greater extent than the State would or could do. Therefore, considering the importance of this industry I think it would be fatal for the Government to undertake ownership and control. The Mover of the Amendment mentioned that there are about 400,000 miners unemployed. Unfortunately we know that many of those men will never be employed again in that industry. We are getting beyond the stage of coal being the only means of obtaining energy and the longer we live the less coal we shall see used. The production of other substances from which energy can be obtained is at present only in its infancy. We want to try to use as much coal as we can—

Mr. DEPUTY-SPEAKER: The hon. Member seems to be getting rather far from the Amendment. I understood the hon. Member for Spennymoor (Mr. Batey) to argue that if this industry were under State control more miners would get back into work, but I did not understand him to go into the general troubles of the coal industry.

Sir W. WAYLAND: I accept your correction, Mr. Deputy-Speaker. I say, in conclusion, that I am confident, if this new industry is left to private competition and development, firstly that it will not cost anything like what the hon. Member has suggested as regards installation, and secondly, that it will progress far in advance of anything that the State could achieve.

9.8 p.m.

Mr. TINKER: The hon. Member for Canterbury (Sir W. Wayland) asked the pertinent question, could we point to any State undertaking which had succeeded. But we are in the age of private enterprise. The question which he ought to ask is, "Has private enterprise succeeded?" If he asks that question I refer him to the discussion here earlier this evening which showed that the shipping industry, having failed under private enterprise, has had to come to the State for millions of money to enable them to carry on. The hon. Member asks us has public ownership succeeded or not. What we are asking for is a trial. In the whole history of these islands public control and state ownership have never had an opportunity. We are now considering the starting of a new industry. We on this side believe that the time has come when oil must be produced from coal. We believe that we should no longer tolerate the sending in of oil from overseas to this country to deprive our people of their work.
Recognising the facts we agree with the extraction of oil from coal. There is common agreement so far. Then comes the dividing line. This Government, composed largely of those who are termed National representatives, but who to our minds are Conservatives, feel themselves called upon to bolster up private enterprise. They say that this new industry must be put under private control and that all the advantages must be given over to private enterprise. But if private enterprise sets up large plant under the direction of the State and at the end of five or 10 years finds that it cannot succeed, then it will be in a position to come here and say: "We took State protection, believing that this process would be a success; it has not been a success; we have built up large plant believing that the State was behind us, and we have shareholders with money invested in it." The old cry will be
heard about the widow's mite and about the people who have small sums invested and there will be the usual appeal to the Labour benches and we shall be asked not to throw those people on the scrap heap. If I were then a Member of this House I should feel bound to say, "Yes; you were given that power by the State and the State cannot now leave you in the lurch."
We want this new industry to be placed under State control at the very start so as to avoid that possibility. Personally, I think it will be a success and I want the benefit of that success to come to the State. I do not want private enterprise to have two chances—first the chance of succeeding with the backing of the State and getting away with the whole of the profits, and second, the chance of putting all the responsibility on the State in the event of failure. I want the State to have all the advantage instead of being called upon later to hand out money to private individuals who have set up plant under State protection. The House would be well advised, on those grounds, to decide that the State is to take full control at the outset. All the evidence points that way. We find industry after industry reaching a position in which it cannot survive and it would be unwise at this stage to hand over a new industry like this to private ownership. I hope we shall be able to persuade a sufficient number of Members to back us in this matter of ensuring that the benefit of this new industry shall go to the State and to the coal industry, and that it shall not be used merely for the profit of private enterprise.

9.12 p.m.

Mr. ROBINSON: I have listened with great interest to the three speeches in support of the Amendment. I can agree with them only in one particular—that the proposition to produce oil from coal is a good one. I disagree with them entirely in the suggestion that it should be run by the State. I do not agree with nationalisation and that is what their proposal means. They say they want a trial for public ownership. I say that this new industry is too precious a heritage to be entrusted to their hands. The hon. Member for Spennymoor (Mr. Batey) objected to the present proposal because he said it created a monopoly. But there is no monopoly. We have more than one company in the field already. Imperial Chemi-
cal Industries, Limited, are building one big plant but the Low Temperature Carbonisation Company has announced that it is going to put two more new plants. Surely that is not monopoly. The only complaint which the hon. Member can have is against the Patents Act which says that if a scientist makes an invention he has, on taking out the necessary patent, the right of exploitation of that particular invention for a certain period of time. Surely, that is another matter entirely.
The hon. Member for Normanton (Mr. T. Smith) did not agree with the Mover of the Amendment. His complaint was not that there is monopoly, but that we were going to have the scandalous competition of private enterprise, with one firm fighting against another. Surely, monopoly would come only if the concern was handed over to State ownership. It may be that this industry will want cheap coal but there is in operation the Coal Mines Act which regulates the price of coal and this new industry could hardly get behind that whatever it does. Hon. Members apparently want to take the factory away from Billingham and put it by the side of the coal mines, and run the two industries together. That proposal inevitably involves the nationalisation of the mines as well as of the new industry. The hon. Member objected to the proposal because he said it was in the hands of Imperial Chemical Industries, Limited, or private enterprise hands, which would mean low wages. I entirely disagree. If the hon. Member will carry his mind back over the space of a year, he will realise that the very firm which is taking the lead in this new enterprise was the first big concern in the whole of this country to give a lead and increase the wages of its workpeople. When an industry is put in such hands, I believe this House can look forward to its successful pursuit.

9.16 p.m.

Mr. D. G. SOMERVILLE: I am certain the House will not consider the Amendment, because as an Amendment it has no standing whatever. If the Amendment were accepted, there would be State ownership in this industry. One hon. Member said that the Opposition wanted an opportunity of seeing what State ownership could do in this country. Unfortunately, during the War we had many such opportunities, with the result
that to-day we are paying enormous taxes. Many industries were nearly bankrupted and many others were reduced to penury owing to State ownership and direction in the War. I have, however, the strongest possible objection to this proposal from the Government benches. They are trying an entirely experimental thing, a process which has been operated in Germany at great expense to Germany, subsidised by the German Government—

Mr. DEPUTY-SPEAKER: The hon. Member seems to have got away from the Amendment.

Mr. SOMERVILLE: I accept your Ruling, of course, in view of which I cannot pursue the subject, but I would ask all hon. Members to vote against the Amendment, as I am certain that it would not help industry and that it would not help this new enterprise which is proposed to be started.

9.18 p.m.

Mr. CHARLES BROWN: I had no intention of intervening until the speeches of the hon. Members behind me. I am certain that the defenders of private enterprise find themselves in extraordinarily great difficulties in these days. The proposal before us is a suggestion that there shall be State ownership and control of a new industry which many people expect to develop out of this hydrogenation process. Hon. Members behind me have obviously forgotten that this new industry cannot even be started without State assistance. The very basis of the proposal now before the House is the giving of a preference on oil produced from coal, and there you bring in at once, in regard to what you hope will be a major capitalist enterprise, State assistance.

Mr. ROBINSON: That is different from State ownership.

Mr. BROWN: That may very well be, but all defenders of private enterprise in the House are coming along day after day requiring State assistance for private enterprises that are breaking down. We have already had a long discussion to-day about two great shipping companies that have been fighting each other to their mutual destruction, and now they have to combine in order to survive. To combine, they have to have the assistance of the State, and for the life of me I cannot understand how the defenders
of private enterprise can get up in their places when such a proposal is before us and talk in the way they have done about private enterprise. On every side now we are having to call in the assistance of the State where private enterprise all about us is breaking down completely, but there is a special reason in regard to this process why we should have State enterprise and control.
I have said before that I do not entirely agree with those who think that out of this you will get a considerable volume of employment for the coal industry, especially at an early date, although you may do in the distant future. I do not believe the Government are backing this process because they anticipate that they will largely increase the volume of employment in the coal industry. I think they are backing this process for an entirely different reason: they want in certain circumstances to have a home supply of oil. They want a supply of oil produced in this country in certain eventualities, and those eventualities are possible war in the future. I want to say most emphatically that that being, in the opinion of some of us, the main motive prompting this proposal, it is not right that it should be left in the hands of a private undertaking. It is essential, if we are to have real control of the thing, that there should be State ownership and control of it.
Let us remember that Imperial Chemical Industries, Limited, is an international organisation, and I think everybody will agree that as you attempt to commercialise this process, you inevitably make fresh discoveries. That is how discoveries are made and how improvements in industrial undertakings come about. Practical men at work in this plant which is going to be put up, through their practical, every-day experience, will inevitably make new discoveries, which, under the proposals now before the House, will be the property of an international organisation like Imperial Chemical Industries, and they may be of vital importance in the future. Whatever may be the position of those of us on these benches, hon. Members opposite always tell us that they are prepared to do anything in the interests of the defence of this country, and I suggest to them that if they will give consideration of this kind to the Amendment, many of them ought to
follow us into the Division Lobby on the Amendment.

9.23 p.m.

The SECRETARY for MINES (Mr. Ernest Brown): The hon. Member for Spennymoor (Mr. Batey) will not expect me to accept the Amendment, nor to be drawn into a discussion in the very wide field as between public ownersihip on the one hand and private enterprise on the other. That field is much too wide. We might talk for weeks and never meet. He will not tempt me either to he drawn into a discussion in the terms in which he stated it. He knows very well from our discussions upstairs that he always states this problem as if it were merely a question of one company and one particular process. We are not asked to do what he suggests. The Amendment suggests that we should insert, "under State ownership and control." The practical effect of the Amendment would be to limit the preference accorded under the Bill to motor spirit manufactured under State ownership or control, not merely in terms of one process, namely, hydrogenation, but any process from coal, shale, peat, or products thereof. The Amendment asks, not for the nationalisation of some particular monopoly or some particular process, but for the nationalisation of all kinds of undertakings to which the manufacture of motor spirit is only ancillary.
Take, for instance, benzol. This Amendment would refuse the preference to all the gas companies who scrub their gas and produce benzol by that process. The House will see that we could not possibly accept any such Amendment as a practical proposition. The fact is that hon. Members opposite are, in the jargon of the Army, "going through the motions." They are putting up their plea in general terms that, if only they had the power, or this House would take the power, to put the whole of these processes under national control, we should achieve some more rapid and better result, not only for the country but also for the coal industry, than would be achieved by the proposals of the Government in the Bill. We join issue there with hon. Members on the other side; we do not agree with that proposition.
More than that, in the one publicly-recorded report of the discussions of the
Labour party on this subject with regard to the process of hydrogenation, namely the speech of Mr. Thomas Johnston, delivered at Bannockburn, which has been quoted in this House during a previous discussion, the meeting was not then discussing public ownership at all. Bannockburn is a name of great historical interest, and perhaps an appropriate place for Mr. Johnston to make that speech; because, if this Amendment were carried, it would undoubtedly be the Bannockbum of any proposal to get oil from coal by hydrogenation, by low temperature carbonisation, or by any other process. The fact is that they were not discussing the question of public ownership; they were discussing the formation of a public utility company in conjunction with the Imperial Chemical Industries. That might have had some relation to reality; this has no relation whatever to reality. The nation has no right in the patents. The nation has taken no risk in any of these processes at all; the risks have been taken by private enterprise.
I should have thought that, even from their theoretical point of view, the last type of undertaking that the Labour party would wish to see nationalised in an experimental stage would be an undertaking of this kind, where so much depends on research, on the particular kind of individuals who handle the process, and where—as all those concerned understand—we are making the experiment, whether in one process or the other, with a determination to see whether or not we can attain on a commercial basis what we all want. That which hon. Members in all parts of the House agree that we want is the maximum amount of oil which can be obtained from a national source. When the hon. Member for Spennymoor (Mr. Batey) puts forward these pleas and hopes, he is merely "going through the motions." He and his friends have said, both inside and outside the House, that if only he and they had his and their way, it would be best for the development of the process and for the fulfilment of some of the high hopes which he and they have put forward.
I must remind the House that these hopes have not been raised from this Box or by the Government. We, including the Prime Minister, have said from the be-
ginning and right through the whole of the discussions, that we regard this preference as necessary for the full development of this process. It is a vital thing for the country to see that this new process of hydrogenation is tried out. If it is successful, as we believe it will be, it will be potentially one of the biggest things that have been done in the history of this land. I have no doubt whatever that, if this Amendment were a matter of practical policy, the process would fail. I have equally no doubt that, if it were admitted as a practical policy by the Government of the day, no success would have been achieved and no spokesman would have been standing at this Box in support of this or any other process to-day. I ask the House to reject the Amendment.

9.30 p.m.

Mr. GORDON MACDONALD: No hon. Member on this side has ever asked or expected the Government to accept this Amendment. We certainly did not. Those of us who considered this Bill upstairs realised that the Government would not accept this or any other Amendment. We found that this Bill is the result of agreement with bodies outside this House, and that all we are asked to do in this House is to ratify pledges given outside. The Minister is not in a position to accept any Amendment anywhere. Our explanation is very simple. We want this new industry to be an orderly industry, and under this proposal it will be nothing of the kind. Oil will be produced from coal, shale and peat, here, there and anywhere. There will be no control, no orderliness. In our opinion that is not the way in which to encourage a new industry. The statement was made that the Government were not concerned with that matter. I am somewhat surprised that the Minister should argue that he is not concerned about that, and that all the Government are concerned about is that oil should be got from coal. We are concerned about that, but we know that if the process is to be allowed to go along in this higgledy-piggledy way, it will ultimately not be an advantage to the nation or to the mining industry.
We have always been told that the production of oil from coal will be a great thing for the mining industry. The miners believe that; they think that this is going to be the salvation of the mining
industry and a boon to the miners themselves. We know, however, that before it can benefit the mining industry it must be under State control. The Financial Secretary to the Treasury, when winding up the Debate on the previous Bill, said that the relation between Government control and industry was a question which must be seriously considered in the near future. Here is a very fine opportunity of doing that. Here is a new industry; not an old one. Shipping was discussed as an old industry which had failed under private enterprise and for the continuance of which State assistance was essential. This is a new industry, and we say that, before giving it the chance to fail, as many industries have failed in private enterprise, we should see that it starts off under public control.
I noticed, in reading some of the pre-war Debates, that the present Prime Minister was then dealing with a similar question. The money business before the House dealt with the Anglo-Persian Oil Company. I am not quite sure that the Minister of Mines has discussed this question with the Prime Minister. This is what he said:
I think the Government will be very well advised to keep its eye upon this process, not merely for the purpose of stimulating them by buying some of the product, but for the purpose of actually acquiring possession of substantial coalfields, erecting the necessary plant for the production of fuel and for the production of oil fuel, and the laying of the necessary pipe line to bring the oil to the various depots where storage takes place, and also, I think, in the interests of the country, the Government will be well advised in this way to enter the competitive market with the monopolists for the by-products like petrol and so on, in order to protect

Division No. 147.]
AYES.
[9.36 p.m.


Banfield, John William
Groves, Thomas E.
Parkinson, John Allen


Batey, Joseph
Jenkins, Sir William
Price, Gabriel


Brown, C. W. E. (Notts., Mansfield)
Jones, Morgan (Caerphilly)
Smith. Tom (Normanton)


Buchanan, George
Kirkwood, David
Tinker, John Joseph


Daggar, George
Lawson, John James
Williams, David (Swansea, East)


Davies, David L. (Pontypridd)
Leonard, William
Williams, Edward John (Ogmore)


Dobbie, William
Logan, David Gilbert
Williams, Dr. John H. (Llanelly)


Edwards, Charles
Lunn, William



Greenwood, Rt. Hon. Arthur
Macdonald, Gordon (Ince)
TELLERS FOR THE AYES.—


Grenfell, David Rees (Glamorgan)
McEntee, Valentine L.
Mr. John and Mr. D. Graham.


Griffiths, T. (Monmouth, Pontypool)
Mainwaring, William Henry





NOES.


Acland, Rt. Hon. Sir Francis Dyke
Aske, Sir Robert William
Beauchamp, Sir Brograve Campbell


Adams, Samuel Vyvyan T. (Leeds, W.)
Baldwin, Rt. Hon. Stanley
Blindell, James


Albery, Irving James
Balfour, Capt. Harold (I. of Thanet)
Bowyer, Capt. Sir George E. W.


Applin, Lieut.-Col. Reginald V. K.
Balniel, Lord
Boyce, H. Leslie

the consumer against the further operations of these gentlemen, from whom we have experienced so much bitterness and loss during the last five or six years."—[OFFICIAL REPORT, 17th June, 1914; col. 1167, Vol. 63.]

I hope that the Prime Minister still holds some of the opinions which he used to hold in days gone by. If he does, he could not possibly support the Minister of Mines in this proposal.

I think that my hon. Friend the Member for Mansfield (Mr. C. Brown) is right. One of the ultimate purposes of this proposal is to make it possible, if it should be needed, to produce oil in this country; as he suggested the main purpose being in case of war between this country and some other country. If that should be one of the ultimate purposes, surely he must agree that this is the strongest possible argument for this concern to be under public ownership and public control. Why should the country have to be dependent on private enterprise? The hon. Member for East Willesden (Mr. D. G. Somerville) referred to the experiences of the War. He must have forgotten that the only reason why private enterprises were taken over here, there and everywhere in this country during the War was that it was essential for the welfare of the country. Public ownership saved this country during the years 1914–18, and, in our opinion, public ownership, and nothing else, will save this country from its present chaotic condition. I therefore ask the Minister to reconsider his decision on this question.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 29; Noes, 162.

Brocklebank, C. E. R.
Hope, Sydney (Chester, Stalybridge)
Robinson, John Roland


Brown, Ernest (Leith)
Hore-Belisha, Leslie
Ross Taylor, Walter (Woodbridge)


Browne, Captain A. C.
Hornby, Frank
Ruggles-Brise, Colonel E. A.


Burnett, John George
Horobin, Ian M.
Runge, Norah Cecil


Butler, Richard Austen
Hudson, Capt. A. U. M. (Hackney, N.)
Russell, R. J. (Eddisbury)


Campbell, Sir Edward Taswell (Brmly)
Hunter, Dr. Joseph (Dumfries)
Rutherford, John (Edmonton)


Campbell, Vice-Admiral G. (Burnley)
Hunter-Weston, Lt.-Gen. Sir Aylmer
Rutherford, Sir John Hugo (Liverp'l)


Ca[...]orn, Arthur Cecil
Jackson, J. C. (Heywood & Radcliffe)
Salmon, Sir Isidore


Carver, Major William H.
Jones, Lewis (Swansea, West)
Samuel, Samuel (W'dsworth, Putney)


Cautley, Sir Henry S.
Kerr, Hamilton W.
Sandeman, Sir A. N. Stewart


Chapman, Sir Samuel (Edinburgh, S.)
Keyes, Admiral Sir Roger
Savery, Samuel Servington


Christie, James Archibald
Law, Sir Alfred
Shakespeare, Geoffrey H.


Clayton, Sir Christopher
Law, Richard K. (Hull, S. W.)
Shaw, Helen B. (Lanark, Bothwell)


Conant, R. J. E.
Leckie, J. A.
Shepperson, Sir Ernest W.


Cook, Thomas A.
Leech, Dr. J. W.
Simmonds, Oliver Edwin


Cooke, Douglas
Leighton, Major B. E. P.
Skelton, Archibald Noel


Copeland, Ida
Levy, Thomas
Smiles, Lieut.-Col. Sir Walter D.


Crookshank, Col. C. de Windt (Bootle)
Liddall, Walter S.
Smith, Louis W. (Sheffield, Hallam)


Crookshank, Capt. H. C. (Gainsb'ro)
Lockwood, John C. (Hackney, C.)
Smith, R. W. (Ab'rd'n & Kinc'dine, C.)


Crossley, A. C.
Loftus, Pierce C.
Somervell, Sir Donald


Cruddas, Lieut.-Colonel Bernard
Lovat-Fraser, James Alexander
Somerville, D. G. (Willesden, East)


Davies, Edward C. (Montgomery)
Lumley, Captain Lawrence R.
Sotheron-Estcourt, Captain T. E.


Davies, Maj. Geo. F. (Somerset, Yeovil)
MacAndrew, Lt.-Col. C. G. (Partick)
Spencer, Captain Richard A.


Denville, Alfrad
MacAndrew, Capt. J. O. (Ayr)
Spens, William Patrick


Dickie, John P.
McEwen, Captain J. H. F.
Stones, James


Drewe, Cedric
McLean, Major Sir Alan
Storey, Samuel


Duncan, James A. L. (Kensington, N.)
Magnay, Thomas
Stourton, Hon. John J.


Dunglass, Lord
Makins, Brigadier-General Ernest
Strauss, Edward A.


Edge, Sir William
Mander, Geoffrey le M.
Strickland, Captain W. F.


Essenhigh, Reginald Clare
Manningham-Buller, Lt.-Col. Sir M.
Summersby, Charles H.


Evans, R. T. (Carmarthen)
Margesson, Capt Rt. Hon. H. D. R.
Sutcliffe, Harold


Fleming, Edward Lascelles
Mayhew, Lieut.-Colonel John
Tree, Ronald


Foot, Dingle (Dundee)
Mills, Sir Frederick (Layton, E.)
Tufnell, Lieut.-Commander R. L.


Ford, Sir Patrick J.
Mills, Major J. D. (New Forest)
Turton, Robert Hugh


Fremantle, Sir Francis
Mitchell, Harold P. (Br'tf'd & Chisw'k)
Ward, Irene Mary Bewick (Wallsend)


Fuller, Captain A. G.
Muirhead, Lieut.-Colonel A. J.
Wayland, Sir William A.


Gledhill, Gilbert
Munro, Patrick
Wells, Sydney Richard


Glossop, C. W. H.
Nall, Sir Joseph
White, Henry Graham


Goff, Sir Park
Nation, Brigadier-General J. J. H.
Whyte, Jardine Bell


Goodman, Colonel Albert W.
Normand, Rt. Hon. Wilfrid
Williams, Charles (Devon, Torquay)


Graham, Sir F. Fergus (C'mb'rl'd, N.)
Nunn, William
Wills, Wilfrid D.


Grimston, R. V.
O'Connor, Terence James
Wilson, Lt.-Col. Sir Arnold (Hertf'd)


Gunston, Captain D. W.
Palmer, Francis Noel
Wise, Alfred R.


Guy, J. C. Morrison
Pearson, William G.
Womersley, Walter James


Hamilton, Sir R. W. (Orkney & Z'tl'nd)
Petherick, M.
Wood, Rt. Hon. Sir H. Kingsley


Hammersley, Samuel S.
Peto, Geoffrey K. (W'verh'pt'n, Bilston)
Worthington, Dr. John V.


Harbord, Arthur
Radford, E. A.
Young, Rt. Hon. Sir Hilton (S'v'oaks)


Hartland, George A.
Ramsay, Capt. A. H. M. (Midlothian)
Young, Ernest J. (Middlesbrough, E.)


Haslam, Sir John (Bolton)
Ramsay, T. B. W. (Western Isles)



Hills, Major Rt. Hon. John Waller
Rea, Walter Russell
TELLERS FOR THE NOES.—


Hope, Capt. Hon. A. O. J. (Aston)
Reid, William Allan (Derby)
Commander Southby and Dr.




Morris-Jones.

CLAUSE 2.—(Information, to be furnished to the Board of Trade.)

9.44 p.m.

Mr. G. MACDONALD: I beg to move, in page 2, line 17, after "produced," to insert:
and the average price per ton of coal purchased in connection with such manufacture.
The miners expect to get some advantage from this legislation, but that will be determined entirely by the price of the coal that is used in this process, together with the quantity. Behind this Amendment is a certain amount of suspicion. We in the mining industry are seeing many processes set up to use coal as a raw material, but we find very frequently that it is not to the advantage of the mining industry on the productive side. For some reason or another, though there
is an increased demand for coal for the new processes, the price of the coal seems to suffer. We have suspected that the people interested financially in the production of the coal were also interested in its use as a raw material in the next process, and that they were deliberately keeping the price of the coal low in order to make profits on its use in the new processes. In fact we in Lancashire got so suspicious of a certain steel company, the directorate of which was very similar to the directorate of a big coal company, that we set an inquiry on foot to try to ascertain at what price the coal had been sold by the colliery company to themselves as directors of the steel company, and we have reason to believe that the transfer price was very unfair to the producers of the raw material. To our surprise that view was confirmed during the discussion of this Bill in Committee by
the hon. Member for Stroud (Mr. Perkins), who said in the course of a speech:
A board of directors can make their costs of production what they like. If I were in charge of a benzol plant in a gasworks and was told by my directors to give them the cost of production, the first thing I should do would be to ask them if they wanted to make it high or low, because I could make it whatever they liked. I should make it high by the simple device of putting on to the cost of the benzol the whole of the overhead charges—directors' fees, royalties and so on. If, on the other hand, I am instructed to make them low I can leave out all these overhead charges and put them on the other processes in the gasworks."—[OFFICIAL REPORT (Standing Committee C); 22nd February, 1934, cols. 55–6.]
That is the very thing which we suspect is possible under this legislation, and we do not think this Amendment asks too much from the Secretary for Mines. He has made provision under Clause 2 for information to be furnished to the Board of Trade, and all we ask is that another piece of information to be supplied shall be the average price per ton of coal purchased in connection with such manufacture. We emphasise the word "purchased." We are told that we in the mining industry need not worry any more about the price of coal, because things are so arranged that minimum prices are fixed and we know the minimum price. It is not the minimum price of coal at the pit head for which we are asking. What we want to know is the purchase price paid by the manufacturer for every ton of coal on which fourpence or more is to be paid in connection with this process.
The Minister may tell us that the term "purchase price" may cover a lot of things, and that it will be difficult for him to get this information, but it is not difficult at all. He will know the amount of coal used in this process, and where it was used, and there will be no difficulty in ascertaining the facts. We do not want the information for public property, but we ask that he should know. His knowledge of the price will be ascertainable in this House, and he could at any time allay suspicion by saying that the average market price was the price charged to the manufacturing company. We hope the Minister will not create artificial difficulties. He rather resents the suggestion I have made occasionally that this Bill is the result of a pledge given outside the
House and that on that account he cannot accept Amendments. Instead of resenting the suggestion the best thing he could do would be to prove me wrong by accepting this small Amendment. It will give satisfaction to the miners, who will know that they are getting a fair deal. Let hon. Members who want to help the miners remember this. It is the price paid for the coal used that will ultimately determine whether this legislation is to be of any advantage to the miners. If, though the demand for coal increases, the price goes down pro rata, then this legislation will be of no advantage to the miners. That has been our experience with these processes in the past. Since pre-War days there have been lots of processes attached to the mining industry without any financial advantage to any miner. I ask the Minister to allay the suspicion caused in the minds of the miners.

9.50 p.m.

Mr. GRAHAM WHITE: It does not appear to be clear that this Amendment is really needed at all. Does not the Clause as drafted give power to the Board of Trade to obtain this information if they so desire? If the information is not available to the Board of Trade it is about the only information in connection with the process that is not furnished to them. I think the Minister will make it clear that the Amendment is not needed; but if it is needed I hope he will accept it.

9.51 p.m.

Mr. E. BROWN: I have sometimes thought during the proceedings on this Bill that I might attach the letters "D.D." to the name of the hon. Member for Ince (Mr. G. Macdonald), because he is always so direct and disarming in his remarks to me, but however persuasive and disarming he may be he cannot persuade me that something which does not exist does exist. I have made the statement, and I make it once again, that all that has happened in this matter is that a statement was made in this House by the Prime Minister on behalf of the Government, and on that assurance—and this Bill ratifies the assurance—those concerned in the various processes agreed to go forward. He may have what suspicions he likes, but the fact is that if there had been any Amendment which seemed to me practical in the course of
the Committee stage there would have been no difficulty whatever in my accepting it. But he knows quite well that I cannot accept this Amendment. I told the committee upstairs that in my judgment it is neither necessary nor practicable. He said that the miners are interested in the price of the coal. To listen to his speech one would think that the only point we were concerned with is the price of coal directly used for this particular purpose, but he understands that things are not quite so simple as that. What the Amendment asks is that I should obtain the average price of coal used in these processes. It is not a matter of asking one particular firm which is going to engage in the hydrogenation process.

Mr. G. MACDONALD: You pay them all fourpences.

Mr. BROWN: No, we do not pay them fourpences. There is a preference of 4d., which is a different thing; and it may not be 4d., it may be 8d. or 6d., it depends on the period and the rate. But I do not want to be side tracked. The issue is that this Amendment asks that I should obtain the average price of coal from every firm engaged, whether directly or indirectly, in the manufacture of motor spirit from coal, shale, peat or other indigenous products. What possible justification can there be for asking the Mines Department to ask every gas company in the land, every coke oven firm, or operators of shale oil, low temperature carbonisation, or any other kind of process to declare the average price of the coal they bought? What practical value would it be? In my judgment none. The average price of the coal would convey nothing to the House in terms of a particular operation. The hon. Member knows perfectly well that the average price of coal in one district may be "x," and be much higher 20 miles away from a particular point inside that area. If the hon. Member says that it is necessary that the miners should have this information, my reply is that the coal industry itself has the right under the Act of 1930, Part I, to—

Mr. MACDONALD: The coalowners have.

Mr. BROWN: And the coalowners are as much interested in the price of coal as the miners. They have the power, if
they wish, to classify specially a particular type of coal for a particular purpose and fix their own minimum price. A miner has full protection under the present law, and therefore this Amendment is not merely not desirable, but it is not necessary, and though I regret to disappoint my hon. Friend after his disarming speech I must tell him that I cannot accept it.

9.55 p.m.

Mr. EDWARD WILLIAMS: We do not deny that the coalowners have the power under Part I which the Minister says that they have, but they are not exercising it. It is still feasible for a colliery company to be interested in a process of this kind and to supply coal at less than the fixed minimum price which may obtain in the district. The statement that was made by my hon. Friend is true. Until a few years ago there were very many cases of the kind in many districts in this country, and when the quarterly ascertainments came to hand we were able to find out that the transfer prices from the colliery to the steelworks, for instance, were not comparable to the average market price. It is therefore essential that this Amendment should be accepted by the Government, if the miners are to have something like equity.
One can make a success of any process, substantially, if the raw material is delivered for practically nothing. We do not assume that the coal would be given away, but unless some report can be obtained by the Board of Trade in order to ascertain that the correct price—that is the average market price for a given district and for a given grade or class of coal—is charged to the firm interested in the process, it will be positively true that the process will exploit the productive side of the industry and that, in the ultimate, the miners will have to pay in lower wages. Miners' wages are determined by the price of coal, and, if the market price of coal is not charged, obviously the wages which are based upon that main factor will suffer. We cannot accept the explanation of the Minister and we beg for the support of hon. Members in showing that this Amendment could be accepted. It is a matter of equity for the miners in general.

9.58 p.m.

Mr. MITCHELL: I have listened to the speeches in support of the Amendment,
and particularly to the speech of the hon. Member for Ogmore (Mr. E. Williams). The only argument which I have been able to see in support of the Amendment is that possibly an unfair transfer price might be put forward. I suggest that there is already a safeguard against that. The accounts of every colliery company are audited by chartered accountants, not only on behalf of the coalowners but also on behalf of the Miners' Federation. We have every safeguard. If an unfair transfer price is put forward, it is immediately dealt with.

Mr. E. WILLIAMS: It is possible for a Scottish colliery company, for instance, to supply coal to a process company of this kind where a synthetic treatment of coal is taking place, and to send that coal to a factory in South Wales without violating Part I of the Act. It will be impossible for us to ascertain the correctness of the accounts, because they are outside the district.

Mr. MITCHELL: I cannot agree with that point at all. The books of every colliery company, including the Scottish colliery companies—I speak from personal experience, having some knowledge of the matter—are audited by a firm of chartered accountants. The Miners' Federation have a first-class chartered accountant acting for them and going through the books of every colliery company in Scotland at the present time. If an unfair transfer price did appear in the books of any colliery company it would be open to those chartered accountants to take the matter up immediately and to make representations. The only argument in favour of this Amendment which has been advanced, absolutely falls to the ground, in view of the fact that there is adequate protection in the existing provision in regard to the auditing of the books of every colliery company.

10 p.m.

Mr. BATEY: The Minister gave no substantial argument against this Amendment. He gave no reason why it should not be accepted, but he gave me

Division No. 148.]
AYES.
[10.5 p.m.


Attlee, Clement Richard
Daggar, George
Evans, R. T. (Carmarthen)


Banfield, John William
Davies, David L. (Pontypridd)
Graham, D. M. (Lanark, Hamilton)


Batey, Joseph
Davies, Rhys John (Westhoughton)
Greenwood, Rt. Hon. Arthur


Brown, C. W. E. (Notts., Mansfield)
Debbie, William
Grenfell, David Rees (Glamorgan)


Buchanan, George
Edwards, Charles
Griffiths, T. (Monmouth, Pontypool)

the impression that we have been a little too lenient with him. His argument amounted to this: "It would be impossible to ask everybody who is producing oil from coal to state the price per ton of the coal that they purchased." Under the Bill he is going to have to ask for far more difficult information than that. If he looks at the Bill he will see that he is to ask to be furnished with information with respect to the quantities of oil produced and as to the types and quantities of the material from which it is produced. If that means anything, he has to ask for the quantity and type of coal that they have purchased. It is easy to understand what "quantity of coal" means, but when you come to the word "type" it may mean different things. Does it mean that he has to ask them to supply information as to the amount of small coal which they purchased, the amount of large coal or the amount of coal which is something between small and large? I submit to the Minister that if he is asking for the type and quantity he could easily ask for the price per ton of those quantities.

This is a question in which we are very interested. We have always had a feeling that coal has been sold far too cheaply to undertakings such as railways, iron and steel works and gas and electricity undertakings. When coal is supplied too cheaply our people have suffered because wages depend upon price, and cheap coal means low wages for our men. We are not asking for the information; all that we are asking is that the Ministry of Mines should get the information when they ask for the other information about kinds and quantities. We are really helping the Minister to get more information in regard to the coal industry and to this new industry. I hope that when the Bill goes to another place he will reconsider the matter as to whether such an Amendment as this can be included.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 33; Noes, 165.

Groves, Thomas E.
Lunn, William
Tinker, John Joseph


Jenkins, Sir William
McEntee, Valentine L.
Williams, David (Swansea, East)


Jones, Morgan (Caerphilly)
Mainwaring, William Henry
Williams, Edward John (Ogmore)


Kirkwood, David
Mander, Geoffrey le M.
Williams, Dr. John H. (Llanelly)


Lawson, John James
Parkinson, John Allen



Leonard, William
Price, Gabriel
TELLERS FOR THE AYES.—


Logan, David Gilbert
Smith, Tom (Normanton)
Mr. John and Mr. C. Macdonald.




NOES.


Acland, Rt. Hon. Sir Francis Dyke
Graham, Sir F. Fergus (C'mb'rl'd, N.)
Peto, Geoffrey K. (W'verh'pt'n, Bliston)


Adams, Samuel Vyvyan T. (Leeds, W.)
Grimston, R. V.
Radford, E. A.


Albery, Irving James
Gunston, Captain D. W.
Ramsay, Capt. A. H. M. (Midlothian)


Applin, Lieut.-Col. Reginald V. K.
Guy, J. C. Morrison
Ramsay, T. B. W. (Western Isles)


Aske, Sir Robert William
Hamilton, Sir R. W. (Orkney & Zetl'nd)
Rea, Walter Russell


Baldwin, Rt. Hon. Stanley
Hammersley, Samuel S.
Reid, William Allan (Derby)


Balfour, Capt. Harold (I. of Thanet)
Harbord, Arthur
Robinson, John Roland


Balniel, Lord
Haslam, Sir John (Bolton)
Ross Taylor, Walter (Woodbridge)


Barclay-Harvey, C. M.
Hills, Major Rt. Hon. John Waller
Ruggles-Brise, Colonel E. A.


Barton, Capt. Basil Kelsey
Hope, Capt. Hon. A. O. J. (Aston)
Runge, Norah Cecil


Beauchamp, Sir Brograve Campbell
Hope, Sydney (Chester, Stalybridge)
Russell, R. J. (Eddisbury)


Blindell, James
Hornby, Frank
Rutherford, John (Edmonton)


Boyce, H. Leslie
Horobin, Ian M.
Rutherford, Sir John Hugo (Liverp'l)


Brocklebank, C. E. R.
Horsbrugh, Florence
Salmon, Sir Isidore


Brown, Ernest (Leith)
Hudson, Capt. A. U. M. (Hackney, N.)
Samuel, Samuel (W'dsworth, Putney)


Browne, Captain A. C.
Hunter, Dr. Joseph (Dumfries)
Sandeman, Sir A. N. Stewart


Burnett, John George
Hunter-Weston, Lt.-Gen. Sir Aylmer
Savery, Samuel Servington


Butler, Richard Austen
Jackson, J. C. (Heywood & Radcliffe)
Shakespeare, Geoffrey H.


Campbell, Sir Edward Taswell (Brmly)
Jones, Lewis (Swansea, West)
Shaw, Helen B. (Lanark, Bothwell)


Campbell, Vice-Admiral G. (Burnley)
Kerr, Hamilton W.
Shepperson, Sir Ernest W.


Caporn, Arthur Cecil
Keyes, Admiral Sir Roger
Simmonds, Oliver Edwin


Carver, Major William H.
Latham, Sir Herbert Paul
Skelton, Archibald Noel


Castlereagh, Viscount
Law, Sir Alfred
Smiles, Lieut.-Col. Sir Walter D.


Cautley, Sir Henry S.
Law, Richard K. (Hull, S.W.)
Smith, Louis W. (Sheffield, Hallam)


Chapman, Sir Samuel (Edinburgh, S.)
Leckie, J. A.
Smith, R. W. (Ab'rd'n & Kinc'dine, C.)


Christie, James Archibald
Leech, Dr. J. W.
Somervell, Sir Donald


Clayton, Sir Christopher
Leighton, Major B. E. P.
Somerville, D. G. (Willesden, East)


Conant, R. J. E.
Levy, Thomas
Sotheron-Estcourt, Captain T. E.


Cook, Thomas A.
Liddall, Walter S.
Spencer, Captain Richard A.


Cooke, Douglas
Lockwood, John C. (Hackney, C.)
Spens, William Patrick


Copeland, Ida
Loftus, Pierce C.
Stones, James


Crookshank, Col. C. de Windt (Bootle)
Lovat-Fraser, James Alexander
Storey, Samuel


Crookshank, Capt. H. C. (Gainsb'ro)
Lumley, Captain Lawrence R.
Stourton, Hon. John J.


Crossley, A. C.
MacAndrew, Lt.-Col. C. G. (Partick)
Strauss, Edward A.


Cruddas, Lieut.-Colonel Bernard
MacAndrew, Capt. J. O. (Ayr)
Strickland, Captain W. F.


Davies, Edward C. (Montgomery)
McCorquodale, M. S.
Summersby, Charles H.


Davies, Maj. Geo. F. (Sumerset, Yeovil)
McEwen, Captain J. H. F.
Sutcliffe, Harold


Denville, Alfred
McLean, Major Sir Alan
Tree, Ronald


Dickie, John P.
Magnay, Thomas
Tufneil, Lieut.-Commander R. L.


Doran, Edward
Makins, Brigadier General Ernest
Turton, Robert Hugh


Duckworth, George A. V.
Manningham-Buller, Lt.-Col. Sir M.
Ward, Irene Mary Bewick (Wallsend)


Duncan, James A. L. (Kensington, N.)
Margesson, Capt. Rt. Hon. H. D. R.
Wayland, Sir William A.


Dunglass, Lord
Mayhew, Lieut.-Colonel John
Wells, Sydney Richard


Edge, Sir William
Mills, Sir Frederick (Leyton, E.)
White, Henry Graham


Edmondson, Major A. J.
Mills, Major J. D. (New Forest)
Whyte, Jardine Bell


Essenhigh, Reginald Clare
Mitchell, Harold P. (Br'tf'd & Chisw'k)
Williams, Charles (Devon, Torquay)


Fleming, Edward Lascelies
Muirhead, Lieut.-Colonel A. J.
Wills, Wilfrid D.


Foot, Dingle (Dundee)
Munro, Patrick
Wilson, Lt.-Col. Sir Arnold (Hertf'd)


Ford, Sir Patrick J.
Nall, Sir Joseph
Wise, Alfred R.


Fremantle, Sir Francis
Nation, Brigadier-General J. J. H.
Womersley, Walter James


Fuller, Captain A. G.
Normand, Rt. Hon. Wilfrid
Wood, Rt. Hon. Sir H. Kingsley


Gledhill, Gilbert
Nunn, William
Worthington, Dr. John V.


Glossop, C. W. H.
Palmer, Francis Noel
Young, Rt. Hon. Sir Hilton (S'v'oaks)


Gluckstein, Louis Halle
Patrick, Colin M.



Goff, Sir Park
Pearson, William G.
TELLERS FOR THE NOES.—


Goodman, Colonel Albert W.
Petherick, M.
Captain Sir George Bowyer and




Commander Southby.

Motion made, and Question proposed, "That the Bill be now read the Third time."

10.12 p.m.

Mr. G. GRENFELL: On the Third Reading we wish, without undue delay or any desire to prevent the passage of the Bill in its final form, to point out some objections which we have to the Measure. In order to do that effectively and with the necessary brevity, I will summarise
the provisions of the Bill itself. It provides for a preference on home-manufactured hydrocarbon oils, the preference to be a standard figure of not less than 4d. per gallon for a period of nine years. That is the main provision of Clause 1, and a definition of the term "preference" is given in Sub-section (2). In Clause 2, the Minister arms himself with power to obtain information regarding the new industry which is to be carried on within the scope of the preference,
and the Clause lays down the kind of information which he is to require. Clause 3 deals with the position which may arise in the event of the preference at any time being fixed at a higher point than the 4d. per gallon mentioned in Clause 1, and here we come across the famous formula which the Minister presented to the House in his speech on the Second Reading, and with regard to which the House, I am sure, would, if there had been time, welcome further instruction and entertainment.
The conditions are simple. The Bill is plain in its statement and effects, but there are certain very grave defects that we find in it, and I desire to refer very briefly to the principal ones. We moved an Amendment in Committee the object of which was that the preference should only be allowed to operate so long as Parliament so determines. Our first objection to the Bill is that it fixes this preference for a minimum period of nine years at 4d. per gallon. We were unwilling, and we are still unwilling, that this House should pledge future Parliaments to the continuance of a preference of this kind. We say that no Parliament should pledge its successors to a duty or preference without permitting its successors to express their own views on the preference that has been established.
We have heard that this is a departure and a dangerous precedent in legislation of this kind. The Minister has always contended that it is not so, but we have very grave apprehensions as to the possibility of a Government which happens to be strong enough to over-rule the Opposition and may try to impose upon that and successive Parliaments fiscal limitations which might be a very serious embarrassment indeed to the Government which succeeded the one that made the imposition. We still contend that it is a very dangerous thing in advance, without sufficient information as to how this preference is to operate, and as to the results of the operation of the preference, to commit Parliament to a continuation for a term as long as nine years.
We passed from that and we came to the second Clause, and we urged there that the Minister should obtain very much more information than he seeks to obtain, and we urged that the infor-
mation should be obtained and made available not only in the interest of the coal miners but in the interest of the Minister himself, of the country, and of all those who may be directly or indirectly interested in the new works to be set up under the Bill. The Minister may not desire to-night to give a description of the prospects of this industry, but certain Members are still under the impression that it may develop into a very large industry indeed and may require the conversion of a very considerable tonnage of coal into oil year by year. No limit has been fixed in the Bill and, if the process of hydrogenation or low temperature carbonisation for any other process yet to be discovered is successful, there might be a very considerable quantity of oil derived from manufacture on these lines. The Minister does not know the limits of his commitments. He does not know how many hundreds of thousands or millions of pounds a year he may be called upon to forfeit in the form of taxation in order that this preference may be maintained. He said on the last Amendment that the Government paid nothing towards this process. That is true, but at present there is an actual preference of 8d. per gallon.
The Chancellor of the Exchequer has sought, for various reasons, to derive a revenue from imported hydrocarbon oils. The Customs duty stands at 8d. per gallon. So long as there is no Excise duty and the Customs duty remains at its present level, our effective preference will be 8d. If, in the event of a reduction of the Customs duty, the effective preference is reduced, the period under Clause 3, under the formula, is reduced correspondingly. There is no limit to the aggregate amount that may be found under the Clause and if, as some optimists imagine, the quantity of coal to be converted runs into 5,000,000, 10,000,000 or 15,000,000 tons of coal per annum, that would yield a considerable volume of oil and the loss of revenue of the imported oil now substituted by the oil produced at home would represent a considerable loss indeed to the Exchequer year by year. We think the Secretary for Mines, responsible as he is for collating all the information bearing upon the industry, ought to arm himself with very much more information than he seeks to obtain under Clause 2. We ask that not only should that information be
collated by him, but that there should be a statement made to Parliament once a year. One of the reasons which have prompted us to insist upon this is the need for Government protection of investors, and the people who may be shareholders in these new ventures which may come into existence in very large numbers indeed. The more successful these processes may be, the larger will be the call for new capital to be invested, and the wider will be the invitation to the investing public to take part in these new enterprises.
One hon. Member said, in regard to the Bill which we are discussing to-night, that it might be the beginning of a great ramp, and there is the possibility of a very considerable investment of new capital in the processes of hydrogenation and the comparable processes which are now found to be practicable. Information should be made available in order that the investing public may be safeguarded. The Secretary for Mines should be called upon to state in Parliament from time to time the cost of the material utilised in the industry, the cost of production, and the price of the oil obtainable, and what, in a general way, are the profits. If the public are not protected by a declaration of that kind, it will be open to spurious companies to issue prospectuses conveying false information. The more alluring the prospectuses, the more successful the company promotion may be. This scheme, which holds out very great promise indeed to the mining industry, may be thoroughly discredited in the first two or three years of the experimental period because of a ramp or orgy of speculation which may exist because of the absence of authentic knowledge of the results of the industry.

Mr. ROBINSON: Is not the hon. Gentleman aware that there is a very strict law dealing with false statements in prospectuses.

Mr. GRENFELL: It has not prevented a very large investment in these processes. I remember attending a meeting at which the prospects of hydrogenation of oil were explained by a person who was called an expert. I do not pretend to be an expert in these things, but I know that the person explaining the new industry knew neither the rudiments nor the beginning
of the thing. He looked very respectable and talked very learnedly, rand a very large sum of money was invested in the company which this gentleman represented. He was a gentleman outside this House, I am glad to say. The hon. Gentleman opposite represents a Government who are going to guarantee a preference of 4d. a gallon for nine years, or, if the preference remains at the present standard, of 8d. a gallon for 4½ years. This House is responsible in guaranteeing that preference not only to the taxpayers of this country whose resources will be called upon to supplement the loss in the revenue from imported oil, but in a much more direct sense responsible to the investing public, who are very often said to be the poor widow and other poor people. Certain hon. Members say when it suits their purpose that the poor widow and the poor man is exploited, and I now desire protection for them by asking that the Secretary for Mines shall present reliable information.
We have warned the Secretary for Mines and we warn the Government not to take the risk of bringing this scheme to ruination. They must not shipwreck it for lack of pilotage, lack of lighthouses, lack of warning beacons or whatever may be required to see that the scheme is not unduly exploited. It is a matter of very great moment to the mining industry if we are to turn from coal production to the production of a large part of the liquid fuel that is required in the country. The internal combustion engine is part of modern civilisation and liquid fuel will play an increasingly important part, and it can be produced from the coal which we possess in abundance.
Let us see to it that we embark upon this scheme with every precaution against abuse, exploitation and unfair discrimination in favour of one company as against another. Let everybody who wants to embark upon this process of hydrogenation have a fair field and no favour. Let the public be duly warned that all the information will be given, and let future development be done in the light of the knowledge that all the necessary information will be available. Then we shall feel sure about the scheme. We do not like the idea of subsidies or preferences, but we wish the scheme
well if it is run not in the interests of individual firms but in the interests of the coal industry and the men employed in that industry.

10.27 p.m.

Mr. HOROBIN: Before this Bill passes from the House I feel it incumbent upon someone to recapitulate a few of the more general reasons against it, particularly because no serious attempt has ever been made by the Secretary for Mines to answer them. He is, as we all know, a very devoted and active Secretary for Mines, but he seems to think it is unnecessary to answer the objections to his policy. If I may say so, he sometimes seems to attach a little too much importance to bring Ernest. There seem to be adequate reasons against the Bill for every single school of thought in the House. I cannot conceive how a Labour man can vote for it. The only attempt to justify it that may conceivably appeal to them is the ground that it may produce employment. If the Government have now, after two years successfully pursuing exactly the contrary policy, altered their mind upon that subject—I hope and trust that that is not the case—it would seem to me that a Measure of this sort would be in itself a condemnation of the policy which the Government have pursued, and it would be quite inconsistent with the continuance in office of the President of the Board of Trade and the Chancellor of the Exchequer, whose whole doctrine to the country, in season and out of season, has been exactly to the contrary. They have over and over again prided themselves upon avoiding attempting to produce employment at the cost, direct or indirect, of the taxpayer. This case is particularly flagrant for, on the showing of the figures presented by the Government, this is a suggestion that now, after two years, they support this Bill because it will give employment to 1,000 miners. I suggest that if it be defended upon that kind of ground, that it produces employment, a Bill which after two years produces employment for 1,000 miners is little else than a jest out of place.
Then I turn to the Liberals. I say that I turn to them, but I am not sure where to turn. There is usually a family band on the bench in front of me, and there is an ancient fish-
like Liberal smell below me. There is also some of the species over there, one or two on the bench opposite. Why should any Liberal vote for the Bill? To begin with, it sets up an industry under the cover of a tariff which is guaranteed not to fall below 100 per cent., and which at the present moment is 200 per cent. I can understand hon. Members who may lean to the Free Trade side of this issue being prepared to vote in favour of reasonable tariffs and supporting the Government in an effort to bring down excessive tariffs, but if a tariff of 200 per cent. is not to be considered excessive, I cannot think what the hon. and gallant Member for Bournemouth (Sir H. Croft) has to complain of, for 200 per cent. ought to satisfy anybody. Moreover, I understood that the Liberal section of the Government were supposed to have as one of their interests a reversal of the unhappy progress towards economic nationalism, of helping the awkward position of raw materials producing countries.
What is the situation in regard to this proposal? We are here putting hindrances in the way of a raw material which is brought to this country almost entirely in British ships, largely from of wells in British ownership, some of them actually with a shareholding by the British Government, and it is extremely difficult for any Liberal Member of the Government to have much conviction in, or get much support for, the view that they are endeavouring to reverse a tendency to economic nationalism if they are going to support a Bill of such flagrant economic nationalism as this. I have an extraordinary bad memory, but I believe the Secretary for Mines was once a Liberal, and this argument may possibly, I will not say appeal to him, but may cause twinges in his—[An HON. MEMBER: "Conscience!"]—I was not going to say conscience, because that perhaps would be out of place. The position with regard to the money involved is that every ton of coal which is used in this process will attract an indirect sum from the taxpayer of about £3. We will not argue as to whether the word "subsidy" is a valid word or not, but I think it is a little difficult for Members of this Government, or emissaries of the Government, to get much attention paid to their requests to foreign
Powers not to give artificial and unfair support to competing industries if we are prepared to give as heavy a support as that to an artificially introduced industry of our own.
I turn to the Conservative Members, and after all there are some Conservative Members in the House; they are not all parlour Socialists in disguise or in office. I wonder whether hon. Members do appreciate the effect of this Measure upon the Budget. There are some people like the whole army of imaginative financiers who are always coming down to the investor or the House of Commons and trying to persuade the people that they have found some extraordinarily ingenious way of getting money from nowhere, and as far as I can see the House and the investor believes them. They usually go on to blame the wicked bankers for getting them into trouble. The position I submit is extremely simple. We have here a revenue duty bringing in a very considerable sum of money. Given a state of trade and given a price of petrol, the amount of oil which will be bought is fixed. Therefore, every time anyone buys a ton of oil made by this process it will mean that there is imported one ton less of oil that pays the present heavy revenue duty. That being so, the figures are simply obtained from the statement made by the Prime Minister some time ago. About £1,000,000 of revenue duty will be lost if this scheme is the success which was held out to the House by the Prime Minister.
The dilemma is perfectly clear. Either the Chancellor of the Exchequer wants that money or he does not. If he needs that money, and if we lose £1,000,000 by not importing oil which would pay that duty, he must put on new taxation to make good the loss. If on the other hand he would have had a surplus of £1,000,000, a reduction of taxation which would have been possible will no longer be possible. [AN HON. MEMBER: "What constituency do you represent?"] I am amazed at the degradation of Parliamentary discussion which we have heard earlier this afternoon, and in the interjection of an hon. Friend who says, "What sort of constituency do I represent?" That is positively an immoral interruption. What we are here to do is to weigh arguments, not to see whether we can bully one another or blackmail one another by saying, "Vote for me next time, because I
pointed out that you have a good slipway, and you will get the new Cunarder," or, "Vote for me, for you have now an oil-from-coal installation." I hope my hon. Friend regrets his interruption.
I submit to the House that the Minister is for a period of at least four years causing a loss to the revenue which we can ill afford, a loss of revenue which the House should not consider to be a subject of jest, a loss of revenue which will only mean that either a reduction of taxation which would have been possible will become impossible, or that new taxation will have to be imposed to take its place. For all these reasons, I submit that this is not a Measure which the House should approve, and particularly for the last reason, that it is a continuous and gross waste of public money. During the early part of the afternoon we managed to get rid of a good deal, and it is a pity that we have to finish off the evening by getting rid of £4,000,000 more.

10.39 p.m.

Mr. ROBINSON: I had the privilege of addressing the House on this subject in July. I do not propose to reiterate anything I said then. Therefore my remarks will of necessity be short. The hon. Member for Central Southwark (Mr. Horobin) has had a very pleasant 10 or 15 minutes enjoying himself with destructive criticism. I feel certain that when he visits his electors he will be able to face every one of them and say, "I said in the House that all the other fellows were wrong." That will be the only satisfaction that he can get. I do not propose to follow him with destructive criticism. It is generally agreed that it is vital for the well-being of this country that something should be done to put new life into the coal mining industry. It is further agreed by everyone who is really interested in the cause of coal that these proposals are going to help the coal industry to some extent. It is generally recognised, that in view of declining markets, we must find some new use for coal. Here it is. Dispute seems only to have arisen as to the method by which this industry is to be worked. The Opposition say, "Nationalise it." We have insisted that private enterprise is the best way of doing it. If it succeeds, so much the better. If it fails, there is no loss to the taxpayer. Indeed, if it succeeds the Government have the advan-
tage of sharing in the profits of the industry through the normal channel of taxation.
We are not giving a subsidy. I do not believe that hon. Members of the Opposition understand the difference between a preference and a subsidy, but the people in the country do understand it. If we give a preference to a home-produced article, it is only the logical conclusion of the whole policy of the Government. The Government say, "We will not interfere with this industry, but we will see that as far as possible, it begins under conditions which are as near to the ideal as they can be." What are ideal conditions for an industry? In my opinion the essential thing in a home industry is that it should bear the lowest possible burden of taxation. Here we are helping an industry by making the burden of taxation on the new product as low as we can. That seems the sensible thing to do. There is a second way in which we can try to ensure ideal conditions, that is to see that the conditions which we create in the beginning have as far as possible the virtue of continuity. Some years ago the late Lord Melchett said you could never carry on an industry under uncertainty. If this proposal had to come before the House year after year as has been suggested for reconsideration and approval we would not find the capital in this country willing to invest. Capital is not willing to invest tremendous sums of money in a new enterprise unless they are certain that the conditions under which the enterprise is going to be carried on have some degree of continuity. For that reason I particularly wish to say how much I approve of the principle of securing the continuity of good conditions in the industry.
Certainty and security will go a long way towards making things right. It is because we have certainty and continuity that we see these big plants coming into operation. We see the new plant going up at Billingham. We find the Low Temperature Carbonisation Company promising to commence two new plants as soon as possible. There will be continued expansion of the industry so long as the Government proposals are carried into effect. The fuel which is produced is satisfactory and I am sure that Members of the House were delighted when the
Under-Secretary of State for Air told us that the Air Force were going to take seven times as much fuel produced from coal this year as they took last year. Some of us have wondered with regard to the Navy, because their contracts have not seemed to be so good, but it appears that on the fuel produced from coal which is taken by the Navy there is no preference under this Measure or any other Measure. I hope the Secretary for Mines will keep in consideration that the logical conclusion of his policy would be to extend it so as to cover all the oil produced from coal in England. I feel that we on this side must be very glad indeed that the Government have been able to assist in laying the foundation-stone of what we believe will be a growing and important industry in this country.

10.45 p.m.

Mr. WHITE: Unfortunately, although since July last this matter has been fully discussed, we are really no further advanced now than when the matter was first raised. The matters which were in doubt then are still in doubt, the criticisms which were made then are still unanswered, and for that reason my right hon. and hon. Friends are unable to support the Bill at this stage. In particular, no attempt has been made to meet the criticisms which were raised by my hon. Friend the Member for Gower (Mr. D. Grenfell), with regard to the indeterminate nature of this subsidy, and the point which was also raised by the hon. Member for Central Southwark (Mr. Horobin). If this experiment is successful, which in itself is a matter for speculation, this subsidy may rise to £35,000,000 a year. This country may turn its mind in due course to the definite planning of its national resources, having regard to the whole national economy, and the sooner it does so the better. When that day comes, I fear that, with the haphazard way in which we are proceeding now, the difficulty of the planners may be to get rid of most of the planning which we have already set on foot.
If we had a call from Mr. Wells' visitor from Mars, he would, if he gave his mind to this aspect of our affairs, say, "What an extraordinary race. They are prepared to put the whole resources of the taxpayer behind the further development of any-
thing which is already being produced in superabundance by Nature and which is causing an embarrassment." And that is in fact what we have done and what apparently we are prepared to do. If there is anything which is produced in such an abundance that it is an embarrassment to those concerned in its production, we organise the national resources to produce still more of it. We assist the production of wheat, sugar, and so on, but when it comes to things in which Nature is more niggardly, such as water, it is another matter. We are prepared to give £1,000,000 per annum for the production of surplus petroleum, but for the production of water, which is badly needed throughout the whole country, the organisation of these supplies is limited to a capital contribution of £1,000,000. We are prepared to give a swingeing bounty to sugar amounting to £40,000,000, but when it comes to the provision of houses, which are badly needed by the people, we at once begin to count the cost. As it is, these things are done in a haphazard way. They are the pet schemes of the Departments, brought down to the House, not looking at the whole planning of the national economy, and as a result we get no proper balance sheet of these transactions. They are presented to us from the departmental point of view and from that point of view only.
The hon. Member for Central Southwark referred to the cost of the employment which can be provided by means of this scheme. I think the figures were somewhat larger than those which he quoted, but say some 1,200 miners may he employed on the one plan at Billingham, and some 2,500 men in all. On the basis of the cost of £1,000,000, that would mean an annual charge to the taxpayer of £363 or thereabouts for every man employed, and by a simple process of arithmetic one arrives at the fact that if one devoted the whole of the sum available for the service of the National Debt in the same way, one would have employed half the unemployed people in the country at the present time. The question is whether the House thinks that that is a reasonable proposition which ought to be undertaken.
The mind of this nation has only recently begun to turn towards the subject of national planning, and we are as yet
not very well accustomed to the idea. Our technique of government in dealing with this matter is wholly deficient. Proposals of this kind ought not to be brought forward, as they are, without due consideration; that is to say, without any accurate balance-sheet. We have been told about the employment in the mining industry. We have not, on the other side of the ledger, heard the amount of unemployment which will be caused in the shipping industry or in the shipbuilding industry. Even at this moment, I believe, there are some eight or 10 tankers being built in this country for the purpose of carrying oil, a very useful contribution to the hard-hit shipyards at the present time. Nor, indeed, have we heard from the Minister of Mines the capital loss which will be inflicted on the enormous English oil-producing industry, and even the Government's interest in the Anglo-Persian Oil Company appears to have been overlooked.
We hope that, when this country gives its mind to the development of national planning, there will not be these haphazard movements, but carefully thought-out and co-ordinated schemes having regard to the national policy as a whole. When the Economic Advisory Committee was appointed, some of us thought that the step was one of considerable importance. "Here," we thought, "is a body which will see that these proposals are not brought forward as they have been in the past, but that they will be related together; and that Government Departments will not take decisions separaely and independently of one another, but that there will be some connection between Government Departments and between Members of the Cabinet, who, as we know, are at the present time far too occupied to take a broader view of the whole matter." Schemes which may look perfectly well when considered in vacuo in relation to one particular industry may be quite wrong when they are considered in relation to the national economy as a whole. I therefore sincerely hope that as we proceed with these matters we shall learn wisdom and, instead of coming, as we do, with these haphazard schemes involving in the aggregate enormous sums of the taxpayers' money, sums to which there is no limit and the benefit of which remains in doubt, we shall direct the minds of the Government and of the whole nation towards a more orderly pro-
cedure than we have followed in connection with this scheme and with a very large number of other schemes which have been brought before us during the last few years.

10.53 p.m.

Sir SAMUEL ROBERTS: I should not have intervened in this Debate if it had not been for the very theoretical speeches delivered by the hon. Member for Central Southwark (Mr. Horobin) and the hon. Member who has just sat down. I should just like, in a very few minutes, to try to put a small amount of fact up against that theory. Several years ago I had the opportunity of seeing this Bergius process of hydrogenation at the Government experimental centre at Greenwich. At that time I was told, and I fully realised, that the process was a chemical miracle, but that it was not a matter of commercial possibility. The cost of production of hydrogen was then so great that it was impossible to produce this oil at a reasonable price. Dr. Bergius' process, as far as this country is concerned, has been bought by the Imperial Chemical Industries, and through many years' work of research that concern has brought the process to the state in which, with the 8d. tax imposed, they can carry on. They will, however, have to spend £2,000,000 of money. Could they go to their shareholders and say, "We are spending £2,000,000 of your money, and we simply rely on the fact that there is an 8d. tax on oil at the moment"? They would not be trustees of their shareholders' money if they did that.
This process is a good process; they know it. They have proved to the Government that it is a good process. What they ask the Government is this: "Will you undertake that you will not reduce your duty by more than 50 per cent. over nine years? If you will promise us not to make the reduction on the present duty for that period, then we are prepared to spend our money and prove this process on a large scale." If it is proved that there is something mechanically wrong with it, Imperial Chemical Industries will lose their £2,000,000 and the Government will not lose any revenue. The gamble is for the company to prove it successful. If the company prove it successful, the invention will be to the
great advantage of this country and the coal industry, the coalowners and the coal miners. There will be a huge field in which we can produce oil in this country. At the present time we have to import, and, although we get a revenue on the imports, it is far better to keep employment in this country than receive a revenue and give employment elsewhere.
I cannot follow the hon. Member for Central Southwark in his theories. I know nothing about the policy of other parties, but the Conservative policy is to make as much work in this country for our own people as we can. If this scheme is a success it will produce work. The hon. Member seemed to have forgotten that a large quantity of oil is made in this country to-day from coal. There is the high temperature carbonisation and low temperature carbonisation, and they are really dependent for their existence on the 8d. tax. It would not pay them if the tax came down to 4d. These developments are not in competition. The Bergius process does not compete with the other two. Each of these processes produces another commodity, coke or coalite, but the Bergius process does not produce a residue, but only oil. Therefore they are not in competition with one another, and all three can grow together and prosper without hurting each other. These are a few practical things which make this experiment very desirable. If it succeeds, it will bring great benefit to the country. If it fails, it will be the loss of the shareholders of Imperial Chemical Industries.

10.57 p.m.

Mr. E. BROWN: The summary of the Bill given by the hon. Member for Gower (Mr. D. Grenfell) has relieved me of the obligation of going over the Clauses, but I should like to reply to some of the things he said. He stated that one of his main objections to the Bill is that it does not give the Mines Department power to get enough information. I can assure the House that Clause 2 gives the Department power to get all the information we think necessary and desirable in order to follow these processes through, to ascertain the results, and to get such information for the Treasury as is necessary. With regard to the point that he desires the experiment to be done under national ownership and con-
trol, we have already debated that question. I cannot hope to satisfy the hon. Member for Central Southwark (Mr. Horobin). It would take me an hour to do it, and this is not the time. He enters upon a whole series of theoretical disquisitions and stands on his Olympian heights distributing his criticisms and his praises and his disparagements equally to Socialists and Liberals of all kinds and Conservatives. I looked him up in Dod's Parliamentary Companion, and I see that he is described as "N." That, judging from the series of speeches I have heard him make, may mean either "National" or "nothing."
Whenever the Government tries to do anything active and productive he distributes his warnings Cassandra-like, ad libitum, to all concerned. The Minister of Agriculture, I understand, has fallen under his displeasure. I have, too, but we must bear it as best we may. I have noticed that if there is one person on this globe whom he and his fellow planner, the hon. Member for Stockton-on-Tees (Mr. Macmillan), who sits side by side with him so happily from day to day, hates more than anybody, it is Mr. Roosevelt. I commend to his consideration this simple fact—or assumption if he likes—that President Roosevelt is able to do this extraordinary planning in America probably because, in Mr. Hoover's day, there were too many Horobins who wanted to do nothing. That, I think, is a sufficient answer at this time of night to the hon. Member's theoretical disquisition. The Government have not approached this problem in that temper at all. When he argues about preference, it is very interesting to notice that he is the only hon. Member in the whole of these discussions who has raised that point. Not even my hon. Friend the Member for East Birkenhead (Mr. White), with the other Opposition Liberals, who take Free Trade so seriously, have ever raised that point. He is the only hon. Member who has ever done so; and I do not wonder at it, because I know those other hon. Members feel they would be on very uncertain ground.
We are not for the first time giving a preference to oil from coal. We have been giving a preference to oil from coal from the first day the duty was put on oil. At the moment 40,000,000 gallons
of light oils a year are produced in this country by one process or another, and every gallon of that gets the advantage of the full 8d. preference, and in the whole series of discussions on the oil duty no voice from any quarter has been raised against that action. All we are doing now is to assist people who desire to carry one experiment further, under one particular process, the process of hydrogenation. I am rather surprised at what the hon. Member for East Birkenhead said on that point. If he will take the trouble to turn up the report of the Royal Commission which sat under his leader, he will find very great hopes held out to the mining industry about this very process. I agree that in that passage in the Royal Commission's report there is no reference to any particular plan for putting it into operation. But that is the trouble with all theoretical planning. The hon. Member talks about a plan. What good is a plan unless it has a relation to reality. I can plan as many new worlds as I like by a speech, or an article in a daily newspaper, or in the "Liberal Magazine" or in any other magazine, but my plans would have no validity unless they were translated into action and applied to facts, and before hon. Members come down here to patronise every other Member who is trying to do a practical piece of work they should produce some plans of their own worked out in detail and applied to the facts.
The same observation applies to my hon. Friend the Member for Gower and his friends in reference to their theoretical plans for nationalisation. We claim no such theoretical basis for this Bill. This Bill is the result of a long series of experiments and research work, some of which has been done and subsidised by the State. We have done a great deal of research work, and the State puts aside some £85,000 a year for fuel research work, but this Government is the first Government after a long series of discussions, to bring this great experiment to the realm of possibility.
The only issue on which it remains for me to say a word is this. Is the arrangement in the Bill likely to be too costly for the value of the experiment? Hon. Members who are suspicious, who are doubtful, will say "Yes." We differ. We think the arrangement is a moderate
arrangement, a practical arrangement, an arrangement which commends itself to those who will, as the hon. Member for Ecclesall (Sir S. Roberts) has rightly said, take all risk; and when the hon. Members for East Birkenhead and Central Southwark draw up their balance-sheets in ordinary business I hope they will not draw them up on the principles upon which their speeches were founded to-night, which is to try to put everything they can on the debit side and to find nothing on the credit side. When they say there has been no answer to the financial point, I will prove my statement by repeating the answer, given on behalf of the Government, in regard to this balance sheet on 8th February:
It is not possible to make a reliable estimate of any loss of revenue under the proposed guarantee, as this will depend on a number of uncertain factors, including the extent to which home-produced motor spirit displaces imported spirit, the quantity of spirit produced, the amount of preference and the length of the period over which the guarantee extends. As regards the cost to the Exchequer, further considerations, such as the relief of the burden of unemployment, have to be taken into account."—[OFFICIAL REPORT, 8th February, 1934; col. 1385, Vol. 285.]
As a matter of fact the hon. Member for East Birkenhead did a very simple trick. He got the figure £363 into his mind and then he said, "That is going to be the cost." He made an assumption, but he did not realise that he made an assumption. It is only when the balance-sheet can be worked out in practice that anybody is entitled to say what the cost will be. The hon. Member's assumption is that every ton of oil produced from Billingham will replace a ton of oil from abroad. May I point out to the hon. Member for East Birkenhead that last year there was an increase in the importation of motor spirit three times greater than the total estimated production from Birmingham in a full year. The argument in my judgment therefore falls to the ground. I ask hon. Members to believe that the hon. Member for Gower is right, and that this is a Bill which gives great promise to the mining industry. I will leave it there, in the confidence that the House will give the Bill a Third Reading.

Question put, and agreed to.

Bill read the Third time, and passed.

Orders of the Day — RURAL WATER SUPPLIES BILL.

Considered in Committee.

[Captain BOURNE in the Chair.]

CLAUSE 1.—(Government contributions towards expenses of local authorities for rural water supply.)

11.8 p.m.

Sir HENRY CAUTLEY: I beg to move, in page 1, line 13, at the end, to insert:
Provided that no such contribution shall be made towards the expenses of any local authority in providing a supply of water where persons who do not benefit by the supply are rated or are to be rated under a general sanitary rate or rate in aid or otherwise.
The object of this Amendment, so far as I understand it, is to get rid of the rate-in-aid as applied to the old water supply. The Committee are aware that the difficulty of water supply for rural districts is the cost. Consumers can never pay a rate that should be levied to provide for the cost. It is found by experience that about 2s. 6d. to 3s. in the £ is the very utmost of rate that will be paid for water, and in practically every case that sum is insufficient to pay the cost. Water supplies are constructed and financed by the rural district council. In the recent Local Government Act provision was made for a grant-in-aid to be given by the rural district council itself, and also by the county council. These two grants have been very difficult to obtain, and as a method had to be found for providing the money to pay for the cost of sinking fund and interest on the expenditure over and above the money provided by the rates, the practice has grown up of the rural district council levying what is called a rate-in-aid to provide for these expenses, such rate-in-aid being levied over the whole parish that is being supplied with water. I do not think I am exaggerating when I say that in any water scheme in a country parish, at any rate in a parish of any size, the physical impossibilities of supply are insuperable in the case of many houses and inhabitants, and that not more than about 60 per cent., or at the outside 70 per cent.—the percentage is very rarely as high as 70—of the houses can be supplied at all.
The result, therefore, has been that the rate-in-aid has to be applied over the whole parish, and from 30 to 40 per cent. of the inhabitants have to pay,
during the whole period of the loan, for a service from which they can never by any chance get any benefit, so that the persons most interested in having the water supply have often great difficulty in obtaining it. It has therefore been difficult to obtain the assent of the village or district council to such schemes, and that has tended in a great measure to prevent the making of such efforts as might have been made by many of the ratepayers. I have in my pocket a letter which appeared in the "Times" to-day, written on behalf of the County Councils Association and the Rural District Councils Association, from which I gather that the Ministry rather agrees as to the desirability of getting rid of the rate-in-aid. The letter suggests that, where the rural district council agrees to pay by way of grant out of such funds as it has, instead of levying a rate-in-aid, that should not go against them in obtaining a share of the grant of £1,000,000 from the Ministry. The Amendment which I am moving would provide that the rural district councils shall find the money and then go to the Ministry for a grant, so that the very unfair method of providing the money for these schemes by compelling persons to pay who can never get any benefit from them may be avoided.

11.14 p.m.

The MINISTER of HEALTH (Sir Hilton Young): My hon. and learned Friend the Member for East Grinstead (Sir H. Cautley) has put his Amendment clearly, as he always does, and has described the present state of affairs with perfect accuracy, but I think it is clear from what he has said that what he is really moving is a very far-reaching change in the general law of the land with reference to the supply of water. The effect of the Amendment would be that any deficiency, after allowing for the direct charges for water upon the consumer, would have to be met out of Exchequer funds, and that would be directly contrary to the basis of our present system of supplying water, which is that there shall be a spreading of the burden not only over the parish or the rural locality concerned, but even that there should be a wider spreading of the burden over the rural district and even over the county. If you did not do that, you would never get a supply of water in the rural areas, because it is only by means of fortifying the financial aspect
of schemes of rural water supply by such spreading of the burden that you can in any circumstances contemplate the practical possibility of getting a water supply. I think the hon. and learned Gentleman put the case a little too high when he put it that many persons in a rural parish would derive no benefit from the water supply. I do not think that is so. Even though they do not actually take the supply themselves—and very often it will be their own voluntary choice if they do not—they will indirectly benefit very much indeed from the availability of water in their area, and the general improvement in sanitation and health which comes with an improved water supply. In those circumstances I think it will be plain to the Committee and to the hon. and learned Gentleman that the Amendment would go very much too wide for the purposes of the present Bill, and it will not be possible to accept it.

11.18 p.m.

Sir FRANCIS ACLAND: I cannot think the hon. and learned Gentleman intended in his speech to support the Amendment because the Amendment goes very much further than his speech and, if it were carried, it would not be possible to carry out what we are all in favour of, as wide a spreading of the burden as is reasonably possible. The Amendment surely means that supposing an outlying borough was proposed to be rated to help the surrounding rural water supplies, that would disqualify the scheme for Government help. I think the Rural District Councils Association were on the right lines in suggesting that we ought to get away from the principle of special parish rates and pool and spread as much as reasonably possible. As the Amendment would have a contrary effect, I hope it will not be pressed.

11.19 p.m.

Sir ARNOLD WILSON: I unreservedly endorse the view expressed by the Minister. Only last week I had a representation from four rural district councils which all agreed that the method which the Minister has developed is the one which should be developed and that no other method could possibly ensure any progress in the water supply in sparsely populated areas. In any case persons are not rated but hereditaments,
and those hereditaments may belong to one person stretching over a very wide area. I hope the Amendment will not be pressed.

11.20 p.m.

Sir H. CAUTLEY: I rather gather that the Minister agreed with the object of my Amendment, which was to do away with the rate-in-aid, that is to say, to make the rural district council find the money and then go to the Minister to get a grant. That is what I understood the County Councils' Association and the Rural District Councils' Association meant in this letter, where they say:
We desire to recommend such county and rural district councils which have not already done so to take advantage of the powers conferred upon them by Sections 56 (1) and 57 (1) of the 1929 Act, that is, to make the grant as big as they need.
In this connection it goes on to say:
It is understood that if a rural district council will allocate an immediate deficiency out of their general fund"—
That is to put it over the whole of the rural district instead of a particular parish—
and choose to obviate the need for a special rate on the parish, they would not thereby prejudice their right in their application to the Minister for a grant.
The Amendment was really meant to carry out that principle. However, if the Committee are against me, I do not propose to carry the matter any further.

Amendment negatived.

11.22 p.m.

The DEPUTY-CHAIRMAN: The next Amendment which I call is that in the name of the hon. Member for Ashford (Mr. Spens)—in page 2, line 16, to leave out paragraph (b).

Sir H. CAUTLEY: Is the next Amendment on the Order Paper—in page 1, line 13, at the end, to insert:
Provided that provision for the disposal of sewage shall be deemed to be part of the provision of a supply or to be the improvement of an existing supply of water within the meaning of this section.
ruled out of order, or is it not being selected?

The DEPUTY-CHAIRMAN: The Amendment of the hon. and learned Member is outside the scope of the Bill.

Sir H. CAUTLEY: On a point of Order. I submit that it is in order for the follow-
ing reason. This is a Bill for the purpose of providing a rural water supply, and I venture to say that you cannot have a rural water supply and bring water to the houses unless you also take away the water which is polluted. I ask for your reconsideration of whether polluted water is not part of the water included in a rural water supply.

The DEPUTY-CHAIRMAN: If the hon. and learned Gentleman will look at the Money Resolution, he will find that it is to authorise the provision of money for providing or improving supplies of water in rural localities. I should regard it as a great stretch of the English language to say that the disposal of that water was either a provision or an improvement of the supply.

11.24 p.m.

Mr. SPENS: I beg to move, in page 2, line 16, to leave out paragraph (b).
Sub-section (4) of Clause 1 is a very drastic provision. After a plan for improved supplies has been submitted and approved by the Minister and an undertaking has been given for a contribution, such contribution may be withheld in whole or in part. Paragraphs (a) and (c) provide that it may be withheld if the works are not carried out in a satisfactory manner, or if there is default in carrying out the transaction, a provision which the Committee will no doubt think fair.
Paragraph (b) goes very much further. It provides that if it turns out that a supply is not effective, after the proposals have been duly approved by the Minister and an undertaking has been given, and if the Ministry form the view that the ineffectiveness of the supply was because there was some default in the formulation of the original proposal, for which the local authority can be held responsible, then the contribution shall be withheld in whole or part. It appears to us that that would mean that where proposals are put forward by local authorities it would tend to make their investigation by the officers of the Ministry before the undertaking was given much less thorough than they might be, because it would be known that if it turned out that the proposals, after they had been worked out, did not give an effective supply, and if the fault could be attributed to the authority which put
them forward, then the grant need not be given in whole. In considering the proposals to be put forward the local authority would have expert advice and the expert would obviously say to them: "Such and such a proposal may be and probably will be, in our view, effective, but you have to remember that if it turns out ultimately that it is not effective, the Ministry will have power to withhold part of the contribution which it promises you." It is only human nature that in those circumstances the expert would say to the local authority: "Instead of these proposals which we think will probably be effective, you ought to have something much fuller, something more expensive to make it absolutely certain that your proposals will be effective."
We feel that if paragraph (b) stands, in many cases much more expensive proposals will be put forward than will really be necessary; proposals which will take much longer to carry out than is desirable. It does seem rather hard on local authorities that after they have put forward proposals and they have been approved, at a later date the Minister shall have the right to say: "There was some fault in these proposals, for which you are responsible." In those circumstances, although the work has been undertaken on the faith of the Minister's contribution, none the less the Minister is to have the right to withhold the contribution in part. That is quite a different suggestion from withholding part of the contribution on the ground that work which has been approved has been improperly carried out or that there has been some default in carrying out the transaction.

11.29 p.m.

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): I think my hon. and learned Friend is under a misapprehension. He has read into the Clause what no one else ought to read into it. Perhaps I can allay his misapprehension. The Clause is put in as a proper safeguard where State money is undertaken to be paid. When a local authority comes to us and explains its proposals, we accept those proposals, the scheme is carried out, and, if there has been default, a case of wilful negligence, the
contribution may be reduced. The hon. and learned Member for Ashford (Mr. Spens) omitted the word "default." Take the case of a local authority which submits a scheme which is not effective, but which they had every reason to believe would be effective, in a case of that kind the Clause would not apply. It only applies in the case of wilful negligence. Let me give an example. Suppose a local authority says that they have tested the water and find that it is pure and it ultimately turns out that they have not tested the water at all, that is a case of default. The Department cannot possibly check every statement made by every local authority. Take another case, toe case of a surface reservoir where obviously the local authority should take soundings and bore holes, and also see if the foundations are substantial. If they said that they had taken every reasonable precaution to see that the foundations were secured, had bored holes and taken soundings when in fact they had not, that would be a case of default and the Department would be entitled to reduce the contribution. I hope that I have cleared up the apprehensions of the hon. and learned Member.

11.32 p.m.

Sir JOSEPH LAMB: I am sorry that the Parliamentary Secretary cannot accept the Amendment because the words he has used proved that it is necessary we should have the assurance asked for. He has used the words "wilfully negligent." They are not in the Bill, but if he will put them in the Bill we shall be satisfied. At the moment it simply says "default." When a local authority makes an application to the Minister for permission to proceed with work there is an idea that the proposals will be scrutinised by the Department, that they will have the advantage of the expert knowledge at the Ministry. It may not be right for them to rely entirely upon it, and it should not relieve local authorities from taking all the necessary precautions before sending up their schemes, but the fact that the words "wilfully negligent" have been used by the Parliamentary Secretary proves that unless they are in the Bill they have not the security to which they are entitled.

11.33 p.m.

Mr. GLOSSOP: I hope that the Government will consider favourably the views put forward by the hon. Member for Stone (Sir J. Lamb). We accept the interpretation of the Clause put forward by the Parliamentary Secretary, but local authorities will be guided by the actual wording of the Bill itself. It definitely says "effectiveness of any works." Let me give an instance. An urban district council in North Lincolnshire applied to the Minstry for powers to borrow money in order to sink a bore hole. They did so, and they found that the water was so hard that it was quite unsuitable for human consumption. They came to the Ministry again for permission to raise a further loan for the purpose of sinking the bore hole to a greater depth. That was done, and again the water was found to be unsuitable. In that particular case it was the hardest water ever known in the world to have been raised in a bore hole No one can say that that local authority was to blame, no one could possibly tell that the water would be unsuitable. I think it would have been very hard on that local authority if the Minister had gone to that authority and said, "You have not done your work properly." Such an unfortunate experience for that particular authority might have a restraining influence upon local authorities which are undertaking water schemes. If they think that there is any possibility of the water supply which they endeavour to carry out not being effective they might be deterred from embarking on a scheme, and the whole purpose of the Bill in rural areas might be undermined. While I do not wish to press the Amendment, I hope that between now and Report the Minister will see fit to alter the wording of this Clause so as to make it clear to the local authorities that what is in the mind of the Parliamentary Secretary is actually in the Clause itself.

Mr. SHAKESPEARE: I can assure my hon. Friend that the instance he gave, where every reasonable precaution is taken, is not a case of default. Accidents will happen in the best of families and the best of bores. The words of the Clause have a perfectly clear meaning.

Mr. GLOSSOP: I accept the assurance with regard to bore-holes. With regard
to mistakes in families, as I am a bachelor it does not carry much weight.

Mr. SPENS: While I am quite unable to accept the view that default is the same as neglect, on the assurance of the Parliamentary Secretary I do not press the Amendment.

Amendment, by leave, withdrawn.

11.38 p.m.

Mr. SPENS: I beg to move, in page 2, line 27, at the end, to add:
(6) Except as provided in sub-section (3) of this section no payment shall be made by the Minister under this section in respect of any undertaking to make a contribution unless the payment shall have become due and payable within two years from the date on which this Act comes into operation.
The purpose of the Amendment is to set up some sort of time limit for the making of applications to the Minister and the receiving of contributions from the Minister. I feel that something should be done in order to try to make the rural authorities take up this matter and be as expeditious as possible in putting forward their proposals and obtaining contributions from the Minister. It follows almost as a matter of course that those parts of the country which most require the benefit of this contribution are the most rural areas, where the authorities are the slowest to get going and to put forward proposals. Our feeling is that same sort of spur should be inserted in the Bill. It is undesirable that authority should be given to the Ministry to expend £1,000,000 without any time limit. When a sum of that sort has been voted, some time limit should be set within which it is to be used and, if further funds are required, further authority should be asked from the House of Commons. In those circumstances we suggest that a limit of two years should be inserted for the expenditure of the money in respect of these contributions, unless an arrangement has been made in respect of a lease going on for a period of years.

11.41 p.m.

Sir H. YOUNG: I have the strongest possible sympathy with the motives which underlie the Amendment, but it appears to me that this is a matter which should be left to administration and that it would not be an advantage to deal with it by legislation. It is agreed that
this is a Bill, the administration of which should be carried out as a matter of urgency and, indeed, if I may put it in that way, under pressure. It is agreed that no time should be lost, subject to the preparation of sound economic schemes, in getting the work done. But as my hon. and learned Friend indicated in his speech the most powerful incentive to local authorities to get their schemes through is the old principle of "first come, first served." When there is only £1,000,000 to come they will not be slow in making sure of their share of it.
Apart from that consideration, there is the possibility that a cast-iron limitation of the sort proposed might do harm in certain cases. I can imagine a case in which there had come into being a big area scheme for dealing with a number of rural localities—I hope there may be such schemes—and in that case it might be found impossible to proceed within a limitation of this kind. I can also imagine a case in which a scheme had been agreed upon. It is thought that water will be found in a particular place but water is not found there. A search for water takes place, time passes and it may be that at the last minute the water is found, but because of some cast-iron system such as that proposed here, the chance of carrying out the scheme is lost. Let me remind the Committee of this circumstance which I think will be a final reassurance—that in letting the Bill go in its present form, without Amendment, the House of Commons is not losing control of the matter. If it is thought at any time undesirable that a scheme should be allowed to linger on any longer, the House can always bring it to a conclusion by refusing the annual Vote necessary to implement the Bill.

11.44 p.m.

Sir J. LAMB: The Committee appreciate what the Minister has said. We put down the Amendment because we feared that what has happened in the past might happen again in the future, namely that some dilatory local authorities will not take the necessary steps to see that the water is supplied within a reasonable time. There is a great deal of urgency in the matter and after what the Minister has said, will he undertake to see that local authorities are urged
and almost compelled, to take up this matter and where urgency exists to see that something is done.

Sir H. YOUNG: I can certainly give the assurance that every possible means will be taken to bring to the attention of local authorities their opportunity under the Bill and urge them to take advantage of it.

Mr. SPENS: In view of the Minister's statement, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

11.45 p.m.

Mr. TURTON: I desire to raise a point with regard to the words "expenses to be incurred." On the Second Reading I mentioned a case in my constituency of three villages that, on the encouragement of the Minister, had applied for a scheme. They had got the preliminary expenses, but no other expenses had been incurred when the Minister made his announcement that he would give a grant for all such schemes. In the Debate on the Second Reading I asked the Parliamentary Secretary if those parishes would be excluded from getting a grant. There was no question about the merits of their application. A penny rate for those parishes would only bring in £5, and the cost of the scheme would involve heavy expenditure in the way of a water rate. I suggest that if there ever was a scheme that ought to be in this Bill, it is that scheme. It happened that, unfortunately for me, in that Debate the right hon. Member for North Cornwall (Sir F. Acland), who has just left the House, also put a point to the Parliamentary Secretary, asking if he could get a grant for schemes that were completed many years ago. In fact, from the right hon. Gentleman's speech, I understood he was asking for grants for schemes of 20 or 30 years ago, at some time when the Liberal section to which he belongs was a live section of politics in this country. Clearly such a scheme would be outside the terms of the Bill or of the Financial Resolution. I am now asking the Minister to make the matter clear, because when the Parliamentary Secretary replied, he said, "The answer is decidedly 'No.'" I understand that in
the heat of the moment I might have got mixed up with the right hon. Member for North Cornwall, but it does not rest there. Since then I have had numbers of letters from rural district councils all over the country, and they tell me that they have had the same reply. I will read one letter from a rural district council, not in my constituency or my county, but in the county of Durham. The clerk writes:
We have already put a scheme up to the Minister to spend £1,750 in providing a rural parish with water, which would entail a rate of something like 2s. 8d. in the £. We have two or three other schemes in hand but are afraid to put these schemes up to the Minister lest we should be prejudiced when we make application for a grant. I wrote to the Minister on the 5th instant and pointedly asked a question in this respect, I am told in reply that the Minister cannot express any opinion as to whether a grant will be available in aid of any particular scheme. 'It is not contemplated, however, that grants are to be made in aid of expenditure already incurred by the Council or to which they are committed.'
Those last are the words that I want the House to consider very carefully. Clearly expenditure which has already been in curred is outside the terms of the Bill, but I submit that it is not just that, if a rural district council are committed to a scheme by having asked for the Minister's sanction to that scheme and have not spent any money other than preliminary expenses on the actual carrying out of the scheme, they should be deprived of the benefit of the grant. If I may venture a legal opinion on this matter, I would ask the Minister to consider the words—and I am glad to see the learned Solicitor-General in his place—"have been incurred." The same words were considered in the Chancery Court, in the case Mayor of West Ham versus Grant. Mr. Justice Kay there asked himself the meaning of the words "incurred expenses." He said:
I need not pause to say what 'incurred expenses' might possibly mean, whether it involves the actual payment of the expenses or not; but it certainly means this, that they have paid, or become liable to pay them at least. Now, in the case before me, the local authority have not incurred—that is to say, they have not paid or become liable to pay—any expenses; and yet they have brought an action in the Chancery Division, asking, not that the expenses which they have incurred, but that the
estimated expenses of doing certain works, which expenses at present they have not incurred, may be made a charge on the premises."—(1889, 58 L.J. Ch. at p. 123.)
This, in my submission, is an actual case on all fours with these cases in my constituency of authorities who have put in estimates of expenditure to the Minister. If the Parliamentary Secretary intends that those schemes cannot rank for grant, then I submit that he is in contradiction to the learned judge in that case of 40 years ago. It may seem to this Committee a paltry matter, and that £4,750 is not very much. I would, however, ask the Parliamentary Secretary and the Minister to go down to those parts of my constituency where they have read the Parliamentary Secretary's reply and where they see that the schemes would burden not themselves only but their sons and their sons' sons with 6s. in the £ water rate. I ask, in view of those circumstances, that the Minister should make it clear that all those local authorities who have submitted their schemes to the Minister but have not actually incurred expenses should be entitled to receive the benefit of this great piece of legislation.

11.53 p.m.

Sir ARNOLD WILSON: Some mercy should be shown to those poor local authorities who have taken at their face value the exhortations of the Minister, dated 11th May last, and have acted in preparing and committing themselves to these exceedingly necessary schemes. I do not know how far even the Minister realises the exceeding urgency of permanent schemes of water supplies in some rural districts. I can only speak for my own area, but the urgency is very great, and those authorities who have committed themselves to schemes on the exhortations of the Minister during the past six months ought, I submit, to be encouraged by some sort of assistance. The considerations which caused some of us to support the proposed limitation of two years were not only merely the encouragement of local authrities but also the giving of an additional inducement to the Minister to consider permanent legislation relating to water, as there are many of us who regard this Bill as being merely of a temporary makeshift nature although it is for permanent water supplies.
By the courtesy of the Minister, I have been studying a series of admirable reports by the Ministry of Health on rural water supplies and rural legislation. After discussing those reports with rural district clerks, surveyors and others, it is clear that unless we get a revision of the dead hand of the past, the Waterworks Act, 1847, and unless legislation is brought up-to-date, as it has been in most other departments of public health with which the Minister of Health is connected, great delay and great expense will be incurred in all sorts of minor ways which do not at first sight appear to Rural District Councils but the nature of which has been made plain by these reports of the Ministry of Health, which urge very extensive legislation which will, if effect is given to it, make cheaper and better work of the kind possible. I urge that this Bill be regarded merely as a temporary measure pending a comprehensive water Bill. There is only one other point with which I wish to deal on this Clause. There may be serious difficulties as between one region and another. There is a Bill in another place—

The DEPUTY-CHAIRMAN: The hon. Member is getting far beyond the scope of Clause 1.

Sir A. WILSON: I was dealing with paragraph (c) that is, default consequent upon some difficulty arising out of the possible default of other local authorities. I hope we shall have regional organisation and planning—

The DEPUTY-CHAIRMAN: I understand the hon. Member is now trying to refer to a Bill in another place. That does not arise here.

11.55 p.m.

Sir H. YOUNG: Let me say as regards the speech of the hon. Member for Hitchin (Sir A. Wilson) that he has said many interesting things which deserve the most careful consideration as to general legislation in regard to water. I think I can assure him that these considerations are present in our minds with regard to the possibility of future legislation. As to the very practical point taken by the hon. Member for Thirsk and Malton (Mr. Turton), the administration of the strict letter and spirit of Clause 1 would proceed Upon perfectly common sense lines, and common sense administration must, of
course, avoid any such danger as he feared. It would obviously be absurd that the mere fact that expenses have been incurred by the preparation of a scheme should disqualify the scheme from participating in the grants, and they will not be disqualified in accordance with the Clause or with any manner in which it will be administered. The hon. Member will, of course, not understand that I am pronouncing on any particular scheme, but such schemes as he had in mind, where all that had been done was to incur expense in preparation, but where expenses in the supply of water had not been incurred, fall within the ambit of the Bill. If, on the other hand, there be cases where expenses have actually been incurred on a definite and determined scheme, they will not fall within the ambit of the Bill, but I do not think that these were the schemes which the hon. Member had in mind.

Question, "That the Clause stand part of the Bill," put, and agreed to.

CLAUSE 2.—(Local authorities for the purposes of this Act.)

Mr. SPENS: I beg to move, in page 2, line 30, to leave out "borough or."
I move the omission of these words for the purpose of eliciting a further explanation from the Minister to that which he gave on Second Reading as to what are actually the rights of borough councils under this Bill. The supply of water is to be in rural localities, but a good deal of misunderstanding exists among borough authorities as to what exactly that is intended to mean in their case. I apprehend that the intention is that there will be under some borough authorities certain areas that can be described as truly rural localities and that it is in respect of such a portion of their area that they can make application under this Bill. On the other hand, there are some borough councils who are under the impression that they can in fact make application under the Bill for the improvement of a water supply in the crowded part of the borough. In these circumstances, some explanation appears to be desirable.

12 m.

Sir J. LAMB: There is one further argument which I would like to put forward. The sum of £1,000,000 may sound a lot, but I am afraid that it will not be sufficient to cope with the necessities of
the whole country, and one of my hopes is that we shall confine this expenditure as far as possible to the most rural areas, which really are suffering worst from lack of water. One of the great injustices which counties suffer from arises from the constant demands of boroughs to extend their boundaries, and the argument most generally used by the boroughs is that they can better supply the amenities to those areas than can the counties. I can conceive that some boroughs may in that way have taken in quite a large area of rural land. Under this Measure they may make an application for assistance in supplying water to those areas, whereas they themselves have used the argument of being able to supply such areas with the amenities in order to get them within their boundaries. My main object in speaking has been to ask that this legislation should be used for the most rural areas in the country.

12.3 a.m.

Major HILLS: The Mover of the Amendment expressed great sympathy with the boroughs, but if it were carried it would inflict a grievous injustice on them. The point against the boroughs made by the hon. Member for Stone (Sir J. Lamb) is the one which I wish to meet. The Bill expressly limits the grant to rural areas, and it does not define those rural areas as being the districts of rural district councils, for the very reason that there may be rural areas within the boundary of a borough or an urban district council, and to debar such an area of a grant would be extremely unfair. Further, on Second Reading the Minister made it clear that he expected the county councils to co-operate, and co-operation in the case of a county council means providing money. Part of that money will be raised from the boroughs, which are liable to contribute to the county rate, and are they to have the pleasure of paying towards the water supply for some rural area in which they have no interest whatever and at the same time see their own rural localities deprived of the grant to which they have a clear right? My hon. Friend the Member for Stone would say to the unfortunate boroughs: It is true that you as county ratepayers are called upon to contribute to the cost of providing water for some distant rural localities; it is true that as taxpayers
you will also find part of the Government grant; and it is true also that you may have a rural locality inside your boundary; but we shall exclude you entirely from the benefits of this Bill. I do not think that would be fair, and I cannot think it was in the mind of the Mover of the Amendment when he submitted it to us.

12.5 a.m.

Mr. SHAKESPEARE: The interpretation of our intentions given by the right hon. and gallant Member for Ripon (Major Hills) is correct. The hon. and learned Member who moved the Amendmend and my hon. Friend the Member for Stone (Sir J. Lamb) will realise that the object of the Bill is primarily to help the small parishes where the amount of the water rate would be intolerable but for this Bill. That is the major purpose of the Bill. It did occur to us that there would be, or might be, a limited number of urban district councils, or even an isolated borough, with a rural fringe on its outer area which might conceivably come within the ambit of this Bill. It will be a very exceptional ease. In the great majority of cases, the boroughs that I know have sufficient resources of their own and would need no contribution from the State. We intend to make this £1,000,000 go a long way in the places where the money will be most needed, namely, the rural parishes.

Mr. SPENS: In view of the statement of the Parliamentary Secretary, for which I am very grateful, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question, "That the Clause stand part of the Bill," put, and agreed to.

Clauses 3 (Application to Scotland) and 4 (Short title and extent), ordered to stand part of the Bill.

NEW CLAUSE.—(Definition of rural locality.)

"A rural locality for the purpose of this Act shall be any borough or urban district or any parish or contributory place within a rural district where the product of a penny rate does not exceed one hundred pounds."—[Mr. Turton.]

Brought up, and read the First time.

12.6 a.m.

Mr. TURTON: I beg to move, "That the Clause be read a Second time."
First, I must apologise to the Committee that the new Clause is not in the same terms as that upon the Paper, which clearly would not have made very good sense. May I ask the Minister what "rural locality" means? I have been at some pains to find out whether the expression has ever before been used in any Act of Parliament. The learned Solicitor-General is here, and perhaps he will be able to enlighten us as to whether it is an entirely new phrase coined behind the scenes, as it were, or whether he has some authority for it. I find that wherever we have a similar phrase, whether it is "rural parish," "rural district," "rural industry" or "rural authority," it always means "within the area of a rural district council." and not outside it. I said "always." May I make one exception? I find in Stroud's Judicial Dictionary that there is one exception in law. I mean "rural dean." I believe that he is not bound within the confines of a rural district council, but I do not think that the Minister of Health can be guided by ecclesiastical law in the drafting of this Bill. I understand from the Parliamentary Secretary that this phrase "rural locality" means something similar to that which an hon. Gentleman mentioned in discussing the previous Amendment. The Committee will remember that on the Second Reading questions were addressed to the Parliamentary Secretary as to what was the exact meaning of the phrase. This was his explanation:
Let me make the position plain. The Bill is designed to help the rural areas, whether in a rural district or, as we hope, in a smaller unit still, in a parish. If it happens that there is a borough with an outlying area which amounts to a small rural locality, then the borough will be able to make a claim under the Bill in respect of that smaller area. In our view, that will be a practical case. It is not our intention to help boroughs which can, for the most part, rely on their own resources. We are out to help those who cannot help themselves, but I can conceive the case of a large urban district or a large borough with a small rural village on the fringe of it, to which this Bill would apply. I hope that I have made that plain."—[OFFICIAL REPORT, 22nd February, 1934; Col. 390, Vol. 286.]
If that is the meaning of the phrase "rural locality" and if a rural locality may be a small parcel of ground within
the large orbit of a borough, we can imagine that if Hyde Park wanted a water scheme—fortunately it has the Serpentine—it would be a rural locality in a borough.
I think that, unless the Bill is to give a large amount of employment to lawyers, this point should be made plain before it becomes law. I have drafted the Clause on the lines laid down by the Parliamentary Secretary in the phrase which I have read. He says that he wants to help those boroughs—and also, I suppose he would agree, those urban district councils—which cannot out of their own fianncial resources help themselves. The object of the Clause is to enable those boroughs and urban district councils whose penny rate does not bring in more than £100 to be called rural localities for the purposes of this. Measure. I do not think I am putting my case too high when I say that for example small urban councils in rural areas whose rateable value is as low as that are not industrial centres, but are really agricultural parishes that have perhaps become enlarged in course of time, or have grown up from ancient history, as small as some rural district councils.
The Minister will know how strange are the divisions as between boroughs, urban districts and rural districts. I myself remember the conditions before the Local Government Act of 1929 came into operation. There are in my constituency two of what I should call, from my country point of view, considerable towns, but what Members representing industrial centres would regard as no larger than hamlets. There are also other far smaller towns. It happens that my largest town is a rural district and my next an urban district. The larger of these towns has a population of 4,000, and only 20 miles away there is, outside my constituency, a hamlet with a population of 500, which is an urban district. My contention is that that town with a population of 500 would not be entitled to the benefits of the Bill as it stands. The line must be drawn somewhere, and I suggest that it should be drawn where the product of a penny rate is not more than £100. There is a great deal of work to be done in these localities. There is one in my constituency which would benefit considerably by the acceptance
of this Clause. Without it I fear the Bill will exclude country towns where a good deal of work on water supply requires to be done.
If the Minister will accept the Clause, much gratitude will be extended to him from the township of Malton. I would ask him not to let this Measure be the subject of continuous litigation in the courts owing to want of clearness as to what is a rural locality. If I am right—I know that the Solicitor-General will correct me if I am wrong—in thinking that the term "rural locality" has never been used in an Act of Parliament before, it is only right and just that, when we are using it for the first time here, Parliament should give it adequate definition.

12.16 a.m.

Sir WILFRID SUGDEN: I support my hon. Friend who has moved this proposed new Clause, and I do so from some little practical knowledge of the applications to the Ministry of Health with respect to these matters. The Ministry has at its command a highly efficient group of inspectors who visit the localities, make proper inquiries and investigate the boundaries and the position of parishes, urban and rural districts. A huge amount of indiscriminate interlap and overlap will take place unless these words are clearly defined. My hon. Friend has pleaded for the exact size and rateable value in respect of the groupings. I would go a little further and ask the Minister to give exact legal entity to the different groups of areas concerned. Many of us who appear before these inspectors know that inspector A will take one view and inspector B, of the same sort of facts, will take an opposite one. I appeal to the Solicitor-General to give us a lead on the matter, because it is going to be expensive, cumbersome and inequitable. If the words of the Amendment are not sufficiently applicable, I suggest that the Solicitor-General might make a correct adjustment.

12.18 a.m.

Sir H. YOUNG: The Mover of the Amendment asked me what is a rural locality? The answer, in the words of the old saw, is that a rural locality is like an elephant, difficult to define but
very easy to recognise when you see it. He says these are new words in an Act of Parliament. They are, because the class with which they deal is a new class created for the purpose of the Act, the class of a rural district plus some rural areas which may be included in urban districts, and for that new class which has not yet existed in any Act we want a phrase. There is no chance of any such litigation, which he and I would deplore, because there is no right in any area to a grant. It cannot claim a grant on the ground that it is a rural locality. It is in the discretion of the holder of the post of Minister for the time being. The effect of the Amendment would be, not to compel but to enable the Minister of Health to include many large and well-to-do urban areas, precisely those areas which it is our intention to exclude. What purpose could the Amendment serve? Only to hold out hopes to a large number of urban areas which there is no possibility whatever of being justified under the Bill. I do not think it would be a wise Amendment, add I trust that it will not be pressed.

Motion and Clause by leave, withdrawn.

Bill reported, without Amendment; to be read the Third time To-morrow.

Orders of the Day — POST OFFICE (SITES) BILL.

Order for Second Reading read.

12.22 a.m.

The POSTMASTER-GENERAL (Sir Kingsley Wood): I beg to move, "That the Bill be now read a Second time."
I do not propose to detain the House for more than a few minutes on this Bill, which I will briefly explain. It is a Bill to enable the Postmaster-General to acquire a site which adjoins certain Post Office premises in King Edward VII Street in the City of London for the purpose of the more convenient accommodation of the Engineer-in-chief and his staff. The Engineer-in-chief of the Post Office and his staff are now housed in no less than seven other buildings. That system has proved exceedingly inconvenient and wasteful, and it is for that particular purpose that we propose to acquire this site, which adjoins the other Post Office buildings. When the site is acquired,
we hope that it will be possible to use this accommodation for the Engineer-in-chief's Department for a number of years and for certain other requirements of the Post Office headquarters offices. The reason why we have to ask for this Bill is that there are a number of occupiers of the premises, and the number and varying character of their interests makes ft impossible to secure the site without compulsory powers.
The plans for the building have not yet been developed, but a rough estimate of the cost of the building is about £280,000, and the cost of the acquisition will probably amount to £155,000. The expenditure will be provided out of a Post Office loan and not by a money Vote of Parliament. On an annual basis the estimated cost of the proposed scheme, both site and building, is about £16,700. The new building will provide a larger amount of space than that which is at present occupied by the Engineer-in-chief, and on present day figures it is estimated that the rental value of this excess accommodation will be over £15,000 a year. Therefore, from a financial point of view, I think that the proposal is also a satisfactory one. It is my intention, if the Bill is given a Second Reading, to ask the House to refer it to a Select Committee, when the details can be further examined and any opposition or demands, or any protection which may be asked for, will be dealt with in the ordinary way.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill committed to a Select Committee of Seven Members, Four to be nominated by the House and Three by the Committee of Selection.

Ordered,
That all Petitions against the Bill, presented at any time not later than ten clear days after the Second Reading of the Bill, be referred to the Committee.

Ordered,
That Petitions against the Bill may be deposited in the Committee and Private Bill Office, provided that such Petitions shall have been prepared and signed in conformity with the Rules and Orders of this House relating to Petitions against Private Bills.

Ordered,
That the Petitioners praying to be heard by themselves, their Counsel, or
Agents, be heard against the Bill, and Counsel heard in support of the Bill.

Ordered,
That the Committee have power to send for persons, papers, and records.

Ordered,
That Three be the quorum."—[Sir K. Wood.]

Orders of the Day — SUPPLY.

REPORT [6th March].

Resolutions reported;

CIVIL ESTIMATES AND ESTIMATES FOR REVENUE DEPARTMENTS, SUPPLEMENTARY ESTIMATES, 1933.

CLASS II.

1. "That a Supplementary sum, not exceeding £1,501,100, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1934, for a Contribution towards the Cost of the Department of His Majesty's Secretary of State for India in Council, including a Grant in Aid, and a Grant in Aid of the defence of India."

CLASS VI.

2. "That a Supplementary sum, not exceeding £1,085, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1934, for the Salaries and Expenses of the Fishery Board for Scotland, including Expenses of Marine Superintendence, and a Grant in Aid of Piers or Quays."

REVENUE DEPARTMENTS.

3. "That a Supplementary sum, not exceeding £10, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1934, for the Salaries and Expenses of the Post Office, including Telegraphs and Telephones."

First Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

12.27 a.m.

Mr. CHURCHILL: During the course of the Debate yesterday I ventured to hazard a suggestion that the Secretary of State for India had been influenced in fixing the scale of this grant by the need of procuring additional funds in order to carry out his policy of giving Federal Home Rule to India, and finding the money for this democratic experiment in India. I was not at that moment in
possession of the quotation of his evidence before the Joint Committee which would support that assertion. I therefore did not make the case with the fullness that I should have been justified in doing. I have since looked up the quotation, with the aid of the admirable index of the evidence before the Joint Committee, and I find that the impression that I had is fully borne out. There is not the slightest doubt that the Secretary of State had in mind the use of this contribution, this additional grant-in-aid of £1,500,000 which we are now to Vote for the purpose of carrying forward this Federal Home Rule Scheme in India. A discussion arose in the Joint Committee about the present financial position of India, what money was available, and very severe and careful examination of the position was undertaken by the hon. Gentleman who is now the Deputy-Leader of the Opposition. Among other questions he asked this:
Have you considered at all the possibility of any part of the burden of defence being taken over as an Imperial burden.
The hon. Member asked whether the right hon. Gentleman had in view any relief from this quarter, or words to that effect. The Secretary of State said:
It is a question, of course, that has constantly been discussed between India and Great Britain for many years and is one of the questions that will emerge out of the Capitation Tribunal decision. I would prefer, if Major Attlee will allow me to do so, to wait until the autumn when I should hope to be able to make a fuller statement of the results of the Capitation Tribunal than I can to-day.
Then a further question was raised as to whether other parts of the Empire paid less, to which the Secretary of State replied:
Major Attlee is raising a very big and a very controversial issue, upon which there has been a discussion for generations. What I can tell him, however, is that this was one of the issues referred to the Capitation Tribunal, composed, as he will remember, of impartial British and Indian judges, and I should hope to be able to make an announcement on the subject when we resume our discussions in the autumn.
That the right hon. Gentleman's hope was not fruitless and that he was justified in his hope was shown by what occurred. The tribunal fixed no figure and gave no award. It merely indicated that there should be a contribution of some kind. That was enough for the
Secretary of State. That was what he had been counting upon. He was then able to go to the Chancellor of the Exchequer and demand from him, as colleague to colleague and as one man in a confederation with another, the means of supplying the finances necessary to bring his home rule scheme into operation. I expect there was a very hard tussle between the Secretary of State and the Chancellor of the Exchequer and that the Chancellor consoled himself by thinking that he had got out of it as cheaply as he could when he gave £1,500,000. The award of the tribunal could perfectly well have been satisfied by £130,000 or simply remitting the other half of the sea transport as was done 20 years ago, but the Secretary of State required this money as a make-weight, and as grist to his mill for bringing his home rule scheme into operation. He demanded and procured from the Chancellor of the Exchequer this £1,500,000, but he would have been very glad to have got more, because even that does not give him as much as he requires. That is my view and I say it is directly connected.
I see it stated in a newspaper which belongs to the Government Press—for they still have some Press left—that it was an unworthy suggestion to say that this demand for £1,500,000 had anything whatever to do with the Indian constitutional reform. I have exposed to the House to-night on the Report stage of this Resolution the direct link and the absolute proof, which no one can dispute. You may try to explain it away and wrap it up in a cloud of words, but there is not the slightest doubt that the hope of the Secretary of State was to obtain a substantial refreshment from this source for his scheme, and he has undoubtedly obtained it. I have indicated how I think the figure was fixed, by this hugger-mugger discussion between the India Office and the Treasury, with the War Office intervening.
But we had an alternative suggestion put before us last night by the Secretary of State as to how he worked out the scheme. He took all the expeditions in which India had assisted the Empire for the last 60 years. He took them all in and said there was so much due on that account. He also looked at the admirable training facilities afforded to our
troops by the large expanses of the Indian plains, and said that there was so much due on that account. How much for each one he did not mention, but, adding them together—the expeditions from the sixties to the present day and these training facilities—he suddenly informed us that the answer was £1,500,000. Of course, anyone who knows anything about the working of the Governmental system knows it was nothing to do with these expeditions and training facilities, but what the Chancellor of the Exchequer thought was the least he could get off with. He did get off, in my opinion, with a very severe mauling such as no other occupant of that office would have tolerated in the last 30 years in regard to this issue. This £1,500,000 which is provided was aimed at and struggled for and fought for as part of the necessary provision for the home rule scheme of the right hon. Gentleman. He is getting it now as a burden for ever fixed upon the people of this country, and, although I do not expect for one moment that the House of Commons, which is the guardian of the public purse, is going to worry about such a bagatelle as £1,500,000 when the Government Whips are on the other side, yet I venture to say that in bringing this matter to the attention of Parliament and to the attention of the country, we have exposed one of the most disagreeable phases of the under-workings which are bringing forward this Indian policy to a conclusion which will be permanently disastrous to our interests.

12.37 a.m.

The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): The right hon. Gentleman has again returned td the charge which he showed so little success in substantiating yesterday. I am only too glad to have the opportunity of drawing attention to the lamentable exhibition which he and his supporters made in this House on the previous occasion on the same subject. That they should have returned to the charge is their own choice, and I hope in a few words I shall be able to show the House and the country that this charge which the right hon. Gentleman has chosen is singularly ill-founded. The right hon. Gentleman had the courtesy to inform me that he was going to raise the subject, and he also had the courtesy to compare with me the results of his researches in the excellent index to
these large volumes. I may say that my researches have come to exactly the same conclusion as those of the right hon. Gentleman, but the deductions which I draw from the quotations of the evidence of my right hon. Friend are totally different from the deductions drawn by the right hon. Gentleman. I would like to remind the House that my right hon. Friend took the unprecedented course of giving evidence for a very long period before the Joint Select Committee. He therefore subjected himself to questions from some of the acutest brains in this country, representing different points of view, and to questions put to him by the representatives of Indian opinion. He was asked by the Deputy-Leader of the Opposition, who is a member of the committee:
Have you considered at all the possibility of any part of that burden being taken over as an Imperial burden?
To my mind the answer which my right hon. Friend gave was absolutely straightforward and was the only answer he could possibly have given in the circumstances. My right hon. Friend said, and he repeated yesterday exactly what he said in evidence before the Committee, that this important question was one which had been constantly discussed between India and Great Britain for many years. That disposes of the theory that the right hon. Gentleman has put up with his usual astuteness, that this has been trumped up at the last minute in order to support our scheme of Indian constitutional reform.

Mr. CHURCHILL: No. I never said it had been trumped up at the last minute. I know this question has been pending for 30 or 40 years, and it has been brought into prominence from its seclusion within recent times.

Mr. BUTLER: My right hon. Friend the Secretary of State made it perfectly clear yesterday that this matter has been under discussion before the decision to set up an arbitral tribunal. I think it is quite unnecessary to rebut all the arguments which the House heard yesterday. The Secretary of State continued with his answer:
I would prefer, if Major Attlee will allow me to do so, to wait until the autumn when I should hope to be able to make a fuller statement on the results of the Capitation Tribunal than I can to-day.
I submit that was the only course that the Secretary of State could have taken. He informed his questioner that he preferred to wait until the Capitation Tribunal reported. I can see no possible objection to his having given an answer of that sort. The Noble Lord the Marquess of Reading asked whether this question had been within the terms of reference of this tribunal, and the Secretary of State answered "Yes." The Noble Lord went on "I do not want to ask any more if you tell me it was," and the Secretary of State replied "Yes, it was one of their terms of reference." Throughout the tenor of his remarks, if the right hon. Gentleman had pursued his researches into the document, he would have seen that the Secretary of State replied in exactly the same sense to Sir Hari Singh Gour. He said:
As Sir Hari Singh Gour will remember, the Capitation Tribunal that was appointed with the approval of the parties concerned, made an inquiry last year. They have issued to the Government a Report, and the Government are now considering that Report.
I think when the House hears the answers of the Secretary of State as they have been read out by the right hon. Member for Epping (Mr. Churchill) and myself, it will see that in answering the Secretary of State took the only course open to him, and that was to say that he was awaiting the report of the tribunal. Into the question of the merits of the tribunal and the merits of the award and so forth, I do not propose to enter now. We debated the matter fully last night, and the House was able to show by the overwhelming vote and the decision it took that it was perfectly satisfied with the explanation of my right hon. Friend. The right hon. Member for Epping takes every opportunity of coming here and misrepresenting the point of view of my right hon. Friend and myself. He chooses to take this opportunity to reproach the Secretary of State for having brought up this subject at this moment. I have explained that this is a subject which has been outstanding for many years, and I think it is one of the successful marks of the administration of my right hon. Friend that he should have brought this stormy and difficult subject which has stood between our two countries for such a long time to such a satisfactory conclusion.

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

Second and Third Resolutions agreed to

COUNTY COURTS (AMENDMENT) [MONEY].

Resolution reported,
That, for the purposes of any Act of the present Session to amend the County Courts Acts, 1888 to 1924, and certain other enactments relating to county courts, it is expedient to authorise—

(a) the payment out of moneys provided by Parliament—

(i) of such remuneration as the Lord Chancellor may, with the approval of the Treasury, determine to be payable to deputy judges and deputy registrars;
(ii) of such contributions as may be made under the said Act by the Commissioners of Works to the expenses of local or public authorities for the purpose of providing court-houses, offices, and buildings for holding and carrying on the business of county courts;

(b) the payment out of the Consolidated Fund—

(i) of such sums as may be necessary for making good failures or defaults of the Accountant-General of the Supreme Court in respect of moneys received by him, or securities vested in him, under the County Courts Funds Rules;
(ii) of such sums as may be necessary to enable the National Debt Commissioners to pay or credit any amount which they are required to pay or credit under the County Courts Funds Rules;
(iii) of such sums as may be payable under the said Act out of the Consolidated Fund to persons whose accounts have been closed under the County Courts Funds Rules;

(c) the payment into the Exchequer of any sum by which in any year the aggregate amount of the interest on money invested by the National Debt Commissioners under the County Courts Funds Rules exceeds the aggregate amount of interest due to be paid or credited in respect of that year on money placed to accounts under the said rules."

Resolution agreed to.

BRITISH SUGAR (SUBSIDY) [MONEY].

Resolution reported,

"That it is expedient—

(a) to authorise payment by the Minister of Agriculture and Fisheries, out of moneys provided by Parliament, in respect of sugar and molasses manufac-
tured in Great Britain during the period of eleven months commencing on the first day of October, nineteen hundred and thirty-four, from beet grown in Great Britain of a subsidy at the rates and subject to the conditions hereinafter mentioned, that is to say:

Sugar: subsidy to be payable in respect of each cwt. of sugar at the rate at which subsidy would have been payable under the British Sugar (Subsidy) Act, 1925, in respect of that sugar if it had been manufactured during the month of September, nineteen hundred and thirty-four;

Molasses:

(i) if the average market price per cwt. of raw sugar for the last quarter of the year nineteen hundred and thirty-four, as certified by the said Minister, is not less than six shillings—no subsidy to be payable;
(ii) if the said price as so certified is less than six shillings but not less than five shillings and sixpence—subsidy to be payable in respect of each cwt. of molasses at a rate equivalent to one-sixtieth part of the subsidy which would have been payable under the said Act of 1925 in respect of that molasses if it had been manufactured in the month of August, nineteen hundred and thirty-four, multiplied by the number of one-tenth parts of a penny by which the said price as so certified falls short of six shillings;
(iii) if the said price as so certified is less than five shillings and sixpence—subsidy to be payable in respect of each cwt. of molasses at the same rate as the subsidy which would have been payable under the said Act of 1925, in respect of that molasses if it had been manufactured in the month of August, nineteen hundred and thirty-four;
(iv) it shall be a condition that the rate of the subsidy payable under the said Act of 1925 in respect of any molasses manufactured during the
1986
month of September, nineteen hundred and thirty-four, shall be calculated in the manner prescribed in the preceding paragraphs with respect to molasses manufactured during the eleven months commencing on the first day of October, nineteen hundred and thirty-four;

(b) to make such incidental provisions, including provisions for the making of advances in respect of the subsidy on molasses pending the certification of the average market price of raw sugar, as are necessary or expedient in relation to the matters aforesaid."

Resolution agreed to.

Bill ordered to be brought in upon the said Resolution by Mr. Elliot, the Chancellor of the Exchequer, and Sir Godfrey Collins.

BRITISH SUGAR (SUBSIDY) BILL,

"to extend by eleven months the period in respect of which subsidies are payable under the British Sugar (Subsidy) Act, 1925, and to make further provision as to the rates of subsidy payable under the said Act, as so amended, and the administration thereof," presented accordingly, and read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 75.]

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock upon Wednesday evening, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Ten Minutes before One o'Clock.